Massachusetts judge blocks Kalshi sports event contracts, escalating state-federal battle over prediction-market regulation

A court-ordered pause for a rapidly growing product

A Massachusetts judge has cleared the way for a preliminary injunction that will prevent KalshiEX LLC from accepting sport-related event contracts from Massachusetts customers unless the company complies with the state’s sports wagering framework, including licensure by the Massachusetts Gaming Commission. The order also denied Kalshi’s motion to dismiss the enforcement case.

The ruling follows a lawsuit filed by Attorney General Andrea Joy Campbell in Suffolk Superior Court in September 2025 that alleges Kalshi has been offering sports-wagering-like products in Massachusetts without a required state license. In a statement released Tuesday, the attorney general’s office said the injunction will prohibit Kalshi from accepting online sports wagers and related event contracts from Massachusetts customers until it follows state sports gaming laws.

How Kalshi’s sports products resemble regulated wagering

Kalshi describes its platform as a prediction market where users trade binary “event contracts,” typically structured around a yes-or-no outcome. Massachusetts officials argue that at least some of Kalshi’s sports offerings function like traditional wagers and mirror products available from licensed sportsbooks, including moneyline-style contracts, point-spread-style contracts, and over-under-style contracts.

The court proceedings have also focused on implementation details—particularly how to stop new sport-related contracts while addressing existing positions that customers may already hold.

Why Massachusetts sees a licensing issue

Massachusetts legalized and regulates sports wagering through a licensing system administered by the Massachusetts Gaming Commission, with requirements that address consumer protections and responsible gaming. State officials contend that allowing sports wagering-like products outside that system undermines the regulatory structure and its safeguards.

• State enforcement position: sports event contracts offered to Massachusetts customers are subject to Massachusetts sports wagering laws and licensing requirements.
• Kalshi’s position in other disputes: the company has argued that its contracts are federally regulated derivatives products rather than state-regulated gambling.

A widening national conflict: state gambling laws vs. federal commodities oversight

The Massachusetts order lands amid intensifying legal disputes nationwide over whether sports-related event contracts fall under federal commodities regulation or state gambling regulation. Kalshi is regulated at the federal level by the Commodity Futures Trading Commission as a derivatives exchange, but state regulators and attorneys general in multiple jurisdictions have challenged whether that federal status displaces state gambling laws when contracts closely track sporting outcomes.

Courts and regulators have reached differing conclusions across jurisdictions. Separately, federal litigation over Kalshi’s political election contracts has narrowed, after the CFTC moved in 2025 to drop its appeal of a decision that permitted election-related event contracts to proceed.

What comes next in Massachusetts

The preliminary injunction is an interim order while the broader case proceeds. The legal fight is expected to continue over where sports-related event contracts fit in the U.S. regulatory landscape—and whether states can enforce sports wagering rules against products offered on federally regulated prediction-market platforms.

Key question: whether sport-related event contracts offered through a federally regulated exchange must still comply with state sports wagering licensing regimes when offered to in-state customers.