Massachusetts Sues Kalshi Over Alleged Unlawful Sports Betting

Massachusetts has launched a civil lawsuit against Kalshi, a prediction market platform. The state claims the company runs what boils down to unlicensed sports betting under the guise of “event contracts.” Attorney General Andrea Joy Campbell filed the case on Friday in Suffolk Superior Court. The lawsuit aims to stop Kalshi’s sports markets in Massachusetts and seek money penalties.

Attorney General Campbell Tries to Stop Kalshi in Massachusetts Claiming Illegal Betting

The complaint states that the platform has handled wagers worth billions, with sports-related contracts accounting for up to 75% of its total trading activity this year. State officials claim these offerings are similar to traditional sports bets, such as moneylines, point spreads, and over/under wagers, but they do not meet licensing requirements, consumer protections, or tax obligations that regulated operators such as DraftKings and FanDuel must follow, reported CNBC.

Regulators in Massachusetts pointed out several issues, including the company’s choice to allow 18-year-olds to trade on sports outcomes even though the state sets the legal betting age at 21. They also criticized Kalshi for its limited tools to promote responsible gaming, noting that features like deposit limits and time-out periods were not available until early 2025.

Campbell’s office stated the lawsuit aims to safeguard the public from dangers linked to uncontrolled gambling. The legal action asks the court to stop Kalshi from operating in Massachusetts as the case proceeds.

Kalshi Claims CFTC Oversight Protects It From State Gambling Laws

Kalshi has stood by its approach, saying it differs from sportsbook betting. The company claims it runs an exchange with federal oversight where users trade contracts with each other, not bet against a bookmaker. It highlights the Commodity Futures Trading Commission’s (CFTC) supervision to prove its legality and argues that federal rules should take precedence over state limits.

In a statement, Kalshi said Massachusetts is using old interpretations of gambling law to stop what the company sees as a financial breakthrough. Leaders said prediction markets give a clear and nationwide option to regular betting, and promised to fight the lawsuit in court.

The argument shows a growing clash between states and prediction platforms about where to draw the line. At least seven other states have told Kalshi to stop its sports offerings, making the company sue in Nevada, New Jersey, and Maryland. While Kalshi has won in some places, other fights are still going on.

The timing also lines up with Kalshi’s quick growth. Sources say the platform handled bets worth hundreds of millions of dollars in the first week of the 2025 NFL season. Its trading volumes were on par with those of big-name sportsbooks.

People who follow the industry claim the company wants new investment that could boost its value to over $5 billion. Massachusetts’ legal action now puts the state at the heart of a nationwide argument. The debate centers on whether prediction markets are a new type of financial tool or just another form of sports betting that should follow local licensing rules.