Judge Delays Injunction After Ruling Kalshi Must Halt Trading Sports-Event Contracts In Massachusetts

Jan 26th, 2026 10:40 AM EST

Kalshi and gaming regulators across the nation have their eyes on Massachusetts. A judge there has temporarily delayed implementing a first-in-the-nation order that allows the Commonwealth to prohibit the prediction market from offering sports-event contracts within the state.

The moves from Judge Christopher Barry-Smith come in the wake of a hearing in December. And Kalshi's unsuccessful effort to remand a lawsuit filed last year by Massachusetts Attorney General Andrea Joy Campbell to a federal court.

"The Commonwealth is entitled to a preliminary injunction prohibiting Kalshi from offering sport-related event contracts in the absence of the required license under the Sports Wagering Law," Judge Barry-Smith wrote on January 20.

"At the hearing both parties discussed, but did not resolve, certain details of the Commonwealth's requested injunction, including how to prohibit new contracts without impacting already existing contracts," the judge added.

Following a hearing on Friday, Barry-Smith delayed issuing his injunction. He plans to schedule another hearing after hearing more from both sides in the next 2 weeks.

If the preliminary injunction goes into effect, Kalshi will have seven days to geofence Massachusetts. It must prohibit the trading of its sports event contracts in the Commonwealth. Based on this hearing schedule, Kalshi's sports event contracts will be available for the Super Bowl in Massachusetts. That's big, considering the New England Patriots represent the AFC.

“The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules – no exceptions. Today’s victory marks a major step toward fortifying Massachusetts' gambling laws. And mitigating the significant public health consequences that come with unregulated gambling," Campbell said in a release.

The move prohibits "Kalshi from accepting online sports wagers and related events contracts from Massachusetts customers until the company follows the state laws that govern sports gaming," the AG's office said.

Massachusetts Gaming Commission Lauds AG's Efforts

“The Commission appreciates the efforts of Attorney General Campbell and the Office of the Attorney General to enforce Massachusetts gaming laws. And is thankful for the recent ruling – we are hopeful this issue can be settled soon. The MGC reminds Massachusetts residents that the safest place to wager, if they choose to do so, is with a legal regulated operator.” said Jordan Maynard, Massachusetts Gaming Commission Chair, in a statement to Bookies.com.

Sports-related contracts have fueled the stratospheric rise in prediction markets such as Robinhood, Polymarket and Kalshi. They make up as much as 90% of the trading volume on Kalshi at times. Boston-based DraftKings, FanDuel, and Fanatics launched prediction-market platforms last year. They, however, do not offer sports-related trades in Massachusetts (or any state) where they operate a licensed online sports book.

The New York State Attorney General filed notice of the Massachusetts decision in that state's case against Kalshi later Tuesday.

Officials from Kalshi had yet to respond on the record.

Mass AG Filed Lawsuit In 2025

Campbell sued Kalshi in September 2025. A federal judge then ruled that the lawsuit against Kalshi must be decided in state, and not federal, court.

The 43-page suit claims Kalshi operates in the same manner as a sports betting site. Kalshi is neither licensed, regulated, nor taxed by the state. Sports betting is regulated and managed by the Massachusetts Gaming Commission.

The broader challenge to determine the difference - if any - between a “trading market” and “sportsbook” remains contested. The Commodities Futures Trading Corporation (CFTC) holds jurisdiction over prediction markets. That frees them from state oversight and taxation. Sportsbooks, meanwhile, remain subject to state-by-state regulations and tax obligations.

Kalshi Entangled In Legal Action In Multiple States

Kalshi has received cease-and-desist orders from Arizona, Illinois, Montana, and Ohio. It has ongoing litigation against New Jersey in the U.S. Court of Appeals for the Third Circuit. And it remains entangled in litigation with regulators in Maryland and Nevada.

"Kalshi offers its users a fair, transparent, federally-regulated, and nationwide marketplace. Rather than engage in dialogue with Kalshi as many other states have done, Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas," a Kalshi spokesperson told bookies.com when the suit was filed.

"Prediction markets are a critical innovation of the 21st century, and all Americans should be able to access them. We are proud to be the company that has pioneered this technology and stand ready to defend it once again in a court of law."

AG: Kalshi Must Obtain A License And Follow Our Laws

“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” Campbell said in a statement when the suit was filed. “This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws."

Kalshi offers "sports wagering" through an “exchange" and via "event contracts," the Massachusetts lawsuit alleges. The filing in in Suffolk County Superior Court uses the term “sports wagering” throughout. And cites examples of Kalshi touting itself as a "sports betting" site on social media.

The sports trading contracts on Kalshi usually offer a “yes” or “no” market on the outcome of an event. Kalshi's offerings have expanded to prop wagers and parlay offerings.

Sports-betting-related terms have appeared in Kalshi's advertising and social-media posts since it launched in the U.S.

Kalshi 'Engaged In Sports Betting,' Suit Says

Kalshi neither applied for nor received a Massachusetts sports wagering licenses, as required by law, the suit alleges.

The suit claims Kalshi engages “in the business of accepting wagers.” Thus, and does so without a license issued by the Massachusetts Gaming Commission.

The AG seeks monetary relief and to prohibit Kalshi from “engaging in sports wagering without a license.”

The suit claims sports-based trading markets operate as regulated sportsbooks.

“Despite Kalshi calling its products ‘event contracts,’ consumers are placing wagers on the outcome of sporting events,” the suit alleges.

MGC Meeting Early Sign Lawsuit Was In Works

The members of the AG’s office met with the Massachusetts Gaming Commission in an executive session in September before filing the suit. A meeting such as that often precedes legal action taken in the gaming space.

“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections. (We) appreciate the Attorney General’s efforts to enforce the law and hold these companies accountable to Massachusetts’ rigorous standards,” said Massachusetts Gaming Commission Chair Jordan Maynard in a statement in September. “We look forward to our continued partnership with Attorney General Campbell and her office.”