Kalshi Hit with Massachusetts Lawsuit Over Sports Prediction Markets

^{Attorney General Andrea Joy Campbell argues Kalshi must obtain a state license to offer sports prediction markets in Massachusetts, comparing them to wagers in regulated sportsbooks. (Photo: Charles Krupa / AP)}

Massachusetts Attorney General Andrea Joy Campbell filed a lawsuit against Kalshi on Sept. 12, alleging that the online prediction market platform was illegally offering sports betting in the state.

In the lawsuit, Campbell compares event contracts to wagers available in licensed Massachusetts sportsbooks, while noting that Kalshi doesn’t hold a license from the Massachusetts Gaming Commission (MGC). 

Attorney General: Kalshi Needs License to Operate in Massachusetts

In the lawsuit, the attorney general also alleges that Kalshi’s platform lacks safeguards required under law for sports betting in Massachusetts. The platform currently allows users as young as 18 to buy contracts, despite the current legal age for sports betting in Massachusetts being 21.

“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” Campbell said in a statement. “This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws.”

In the lawsuit, the attorney general says that approximately 70 percent of Kalshi’s trading volume from February to May came from sporting event contracts.

“Kalshi made more from sports wagers than licensed sports wagering platforms DraftKings or FanDuel over the course of the same February through May timeframe,” the lawsuit alleges. 

MGC Chair Jordan Maynard said that among other issues, sites like Kalshi don’t contribute to state coffers.

“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections,” Maynard said in a statement. “My fellow commissioners and I appreciate the Attorney General’s efforts to enforce the law and hold these companies accountable to Massachusetts’ rigorous standards.”

Kalshi Says CFTC, Not State Regulators, Oversees Prediction Markets

Kalshi, which is regulated by the Commodity Futures Trading Commission (CFTC), made waves in 2024 when it offered trading on markets for the 2024 presidential elections. While the CFTC initially fought a legal battle to prevent election-based markets, Kalshi prevailed in court, and the CFTC dropped its appeal earlier this year.

The company then expanded into sports event contracts in January 2025. Initially, users could only purchase and trade contracts – which pay $1 if the associated outcome occurs – on which team would win a given game. More recently, Kalshi has offered markets on points spreads and Over/Under totals for NFL and college football games as well.

Kalshi argues that its offerings are fundamentally different than sports betting and only need to be regulated by the CFTC, like all predictive contracts.

“Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas,” Kalshi said in a statement. “Prediction markets are a critical innovation of the 21^st century, and all Americans should be able to access them.”

Massachusetts isn’t the first state to accuse Kalshi of offering illegal sports betting. The Nevada Gaming Control Board hit Kalshi with a cease and desist order in March over its sports contract offerings. While a federal district judge granted a preliminary injunction to prevent the enforcement of that order, Maryland regulators had more success in August, when another federal judge ruled that they likely have the authority to regulate Kalshi’s sports-related contracts.