Massachusetts Sues Kalshi Over Illegal Sports Gambling
Massachusetts Takes Aim at Kalshi, Alleging Illegal Sports Gambling
Boston, MA – In a move that could redefine the boundaries between prediction markets and sports wagering, Massachusetts Attorney General Andrea Joy Campbell has filed a lawsuit against Kalshi, a platform that allows users to trade on the outcomes of various events. The lawsuit, filed Friday in Suffolk County superior Court, alleges that Kalshi is operating an unlicensed sports gambling business under the guise of offering event contracts.
“If Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a licence and follow our laws,” Attorney General Campbell stated in a news release. the state is seeking a court order to prevent kalshi from offering sports events contracts in Massachusetts while the lawsuit is pending.
kalshi, regulated as a predictions market by the Commodity Futures Trading Commission (CFTC), has maintained that its federal oversight preempts state regulations. However, Massachusetts argues that Kalshi’s activities within the state constitute illegal sports gambling, as the platform allegedly generates more revenue from sports wagers than licensed sportsbooks like DraftKings and FanDuel.
According to the lawsuit, sports event wagers accounted for approximately 70% of Kalshi’s trading volume between February 25, 2025, and May 17, 2025. This figure reportedly increased to 75% after March 18, 2025, Kalshi’s first day offering single-game March Madness markets. the state contends that during the same period, Kalshi’s revenue from sports wagers surpassed that of established, licensed sports wagering platforms.
The lawsuit raises critical questions about the regulation of prediction markets and their potential overlap with sports gambling. The outcome of this case could have meaningful implications for the future of online trading platforms and the broader sports wagering industry in Massachusetts and beyond.