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.