Massachusetts Initiates Legal Action Against Kalshi for Alleged Unlicensed Sports Gambling
Massachusetts Attorney General Andrea Joy Campbell filed a lawsuit on Friday in Suffolk County Superior Court against Kalshi, a platform known for offering event contracts, accusing the company of conducting sports gambling operations without the necessary state license.
The suit contends that Kalshi has been marketing and profiting from sports event wagers under the pretense of predictions market contracts, circumventing Massachusetts gaming laws. “If Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws,” Campbell said in an official statement.
Allegations of Significant Sports Betting Activity
The complaint highlights that sports event wagers constitute a substantial portion of Kalshi’s trading volume. Between late February and mid-May 2025, sports wagers represented approximately 70% to 75% of the company’s trading activity, beginning with the introduction of single-game March Madness markets. The state asserts that Kalshi’s revenue from these sports wagers surpassed that of established, licensed sportsbooks such as DraftKings and FanDuel during the same period.
Included in the lawsuit is a screenshot of Kalshi’s platform, illustrating the sports betting options offered to Massachusetts residents. A Kalshi spokesperson confirmed to CNBC that $439 million in wagers had been placed on NFL contracts to date.
Regulatory and Legal Context
Kalshi operates under regulation by the Commodity Futures Trading Commission (CFTC), which oversees event contracts as a form of predictions market. The company has argued in federal court that CFTC jurisdiction preempts state regulatory authority, a position that Massachusetts disputes. The state is requesting the court to enjoin Kalshi from offering sports event contracts within Massachusetts while the lawsuit is pending.
Concurrently, Kalshi is engaged in legal proceedings before the 3rd Circuit Court of Appeals, challenging a cease-and-desist order issued by New Jersey authorities. The company has positioned itself at the forefront of a national legal debate regarding the regulatory status of sports prediction trades.
FinOracleAI — Market View
The lawsuit filed by Massachusetts introduces significant regulatory uncertainty around Kalshi’s business model, particularly regarding the classification of event contracts as sports wagers subject to state licensing. This legal challenge could constrain Kalshi’s operations in a key market and potentially invite similar actions from other jurisdictions.
Investors and market participants should monitor the progression of this case and related federal appeals closely, as outcomes could reshape regulatory boundaries between federal and state oversight in the emerging sports prediction market sector.
Impact: negative
