Massachusetts Judge Slams Kalshi with Preliminary Injunction Over Sports Prediction Contracts

^{Massachusetts Attorney General Joy Campbelll's office recently challenged Kalshi’s sports contracts as unlicensed sports betting under Massachusetts law, saying the company must "play by the rules." (Photo: MassAttorneyGeneral via Facebook)}

Suffolk County Superior Court Judge Christopher Barry-Smith granted a request for a preliminary injunction against prediction market platform Kalshi on Tuesday, a move that could see sports contracts pulled in the state of Massachusetts this week.

Massachusetts Attorney General Joy Campbell had filed a 43-page lawsuit seeking to stop Kalshi from operating its sports prediction markets in the state in September 2025, arguing that they amounted to unlicensed sports betting in a state where that industry is regulated.

Judge Finds Congress Didn’t Intend to Preempt State Gaming Laws

That lawsuit hit at the fundamental argument of Kalshi (and other prediction platforms like Polymarket) versus state gaming regulators. Kalshi argues that it is not subject to state gaming laws, as it is federally regulated by the Commodity Futures Trading Commission (CFTC). The company argues that federal law trumps state law under the US Constitution, so it does not need a license from the Massachusetts Gaming Commission (MGC).

But Judge Barry-Smith found that Congress’ decision to regulate derivative markets wasn’t intended as a way to prevent states from fully regulating sports betting.

“Although I agree that the exclusive jurisdiction provision evidences an intent to preempt some state law, I disagree that it extends as far as state gaming laws,” Barry-Smith wrote in his ruling. “While it would make sense for Congress to displace a state’s targeted attempt to regulate a derivative market, for example, or to clarify the roles of separate federal agencies…that logic does not suggest Congress intended to displace traditional state police powers, such as gambling regulation – particularly in the absence of the express language so stating.”

Both Kalshi and the state of Massachusetts have until Friday to submit draft injunctions. Barry-Smith has also said that he will consider any motions to stay the injunction before it is set to go into effect. 

Massachusetts Among Several States Battling Prediction Markets

Massachusetts officials praised the ruling, with regulators saying that residents should stick with regulated operators who are approved to operate in the state. 

“The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules – no exceptions,” Attorney General Campbell said in a statement. “[This ruling is] a major step towards fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling.”

Kalshi has found great success with its sports contracts. Campbell said that it had made more from sports wagering than either FanDuel or DraftKings in the state during a period spanning from February to May 2025, but that growth has come with increased scrutiny. 

Beyond Massachusetts, several other state regulators and attorneys general have targeted the prediction site, claiming it is violating state gaming laws or other regulations. 

In November 2025, a federal judge found that Kalshi was subject to Nevada gaming regulations, and ordered Kalshi to halt offering sports contracts in the state, though that order was partially stayed to allow the Ninth Circuit Court of Appeals to consider the case. In December, the state of Connecticut issued its own cease-and-desist orders against Kalshi along with Robinhood and Crypto.com, ordering the three platforms to stop offering any unlicensed online gambling products to state residents.