Massachusetts Scores Big Win In Lawsuit Against Kalshi

By Bill Speros Oct 28th, 2025 5:43 PM EDT

Massachusetts Attorney General Andrea Campbell Tuesday won the latest round in the Commonwealth's ongoing court battle against the prediction market Kalshi. A federal judge sided with Campbell in ruling that the lawsuit against Kalshi must be decided in state, and not federal, court.

The lawsuit seeks to block Kalshi from accepting sports-related trades in the Commonwealth. Kalshi sought to move the case to federal court but was unsuccessful.

The 43-page suit filed by Campbell in September 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 in several jurisdictions. 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, Polymarket Just Signed Deal With NHL

Last week, the NHL announced a partnership with Kalshi and Polymarket, another prediction market site that has yet to launch in North America. The deal gives the two prediction sites the rights to NHL logos and data. It links the league to these prediction sites. The NBA and MLB remain on the record as critics of predictions markets because they lack the integrity protections as legal sportsbooks.

The Tuesday ruling also comes five days after NBA coach Chauncey Billups, current player Terry Rozier and former player Damon Jones were all arrested in connection with an illegal betting scam allegedly run by three New York Mafia families.

In his ruling filed Tuesday, Federal Judge Richard G. Stearns wrote that his court could not find any ground to grant Kalshi’s motion to move the case to federal court because of the Commodity Exchange Act. His order remands the case to Suffolk County Superior Court.

“The World Series (of Prediction Markets) returns to Boston, Winner-take-all next week in Suffolk County Superior Court,” sports betting and gaming lawyer Daniel Wallach posted on X.

Campbell’s office filed an emergency motion that sought a preliminary injunction to prevents Kalshi from accepting sports-related trades with the Commonwealth during this case.

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” 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 a week 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.”

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