The Massachusetts Attorney General's office has filed a lawsuit against Kalshi, a prediction market platform, alleging it's operating an unlicensed sports gambling operation in the state. The lawsuit, filed Friday in Suffolk County Superior Court, claims Kalshi disguises its sports betting activities as 'events contracts,' skirting state regulations.
Attorney General Andrea Joy Campbell stated that if Kalshi intends to operate in the Massachusetts sports betting market, it must secure the necessary licenses and comply with state laws. The lawsuit seeks to halt Kalshi's operations within the state until the legal matter is resolved.
Kalshi has previously argued in federal court that its status as a predictions market, regulated by the Commodity Futures Trading Commission (CFTC), supersedes state regulations. However, Massachusetts counters this claim, highlighting the substantial revenue Kalshi generates from sports wagers. The lawsuit cites data indicating that sports event wagers comprised a significant majority (70-75%) of Kalshi's trading volume between February 25th and May 17th, 2025, exceeding the revenue generated by licensed sportsbooks like DraftKings and FanDuel during the same period.
A Kalshi spokesperson recently revealed to CNBC that over $439 million in wagers have been placed on NFL contracts through their platform. The company is actively engaged in a broader legal fight, defending its model against state-level challenges nationally. This week, Kalshi presented oral arguments before the 3rd Circuit Court of Appeals in an appeal concerning a cease-and-desist order issued by New Jersey.
This legal action marks a significant development in the ongoing debate surrounding the regulation of prediction markets and their overlap with traditional sports gambling. The outcome of this lawsuit will have considerable implications for the future of such platforms and the regulatory landscape of online betting in the United States.
---
Originally published at: https://www.cnbc.com/2025/09/12/massachusetts-sues-kalshi-sports-gambling.html
