Massachusetts Sues Kalshi Over Alleged Unlicensed Sports Betting, Platform Vows to Fight

Massachusetts Attorney General Andrea Joy Campbell filed a civil lawsuit against prediction market platform Kalshi, alleging the company operates unlicensed sports betting disguised as “event contracts” in violation of state gambling ￰1￱ Commonwealth seeks damages, civil penalties, and a permanent injunction to stop Kalshi from accepting sports wagers without proper licensing from the Massachusetts Gaming ￰2￱ lawsuit filed in Suffolk Superior Court claims Kalshi processed over $1 billion in sports wagers from 3.4 million bets between January and June ￰3￱ contracts comprised 70-75% of Kalshi’s trading volume, surpassing percentages recorded by licensed operators DraftKings and FanDuel during the same period.) September 12, 2025 Federal vs State Jurisdiction Battle Intensifies Across Multiple States Kalshi argues its operations fall under Commodity Futures Trading Commission oversight rather than state gambling ￰4￱ company previously sued Nevada and New Jersey gaming regulators , claiming federal authority preempts state enforcement ￰5￱ courts sided with Kalshi in those cases, barring state regulators from intervening while litigation continues.

However, at least seven states, including Arizona, Montana, Ohio, and Illinois, have issued cease-and-desist orders targeting the platform’s sports ￰6￱ Derivatives filed similar lawsuits against Nevada and New Jersey in August, claiming unfair treatment compared to Kalshi’s protected status. @RobinhoodApp has sued Nevada and New Jersey, accusing the states of unfairly blocking its entry into the sports event contracts. #Robinhood #Crypto ￰0￱ — ￰7￱ (@cryptonews) August 20, 2025 The trading platform facilitates event contracts that settle on Kalshi’s system while seeking identical federal preemption ￰8￱ co-founder Tarek Mansour stated the company stands “ ready to defend ” its technology “ once again in a court of law .” The platform maintains that prediction markets represent “ critical innovation ” that all Americans should have access to.

Meanwhile, rival prediction market Polymarket prepares U. S. re-entry after CEO Shayne Coplan claimed CFTC ￰9￱ Insider reports that Polymarket is seeking funding that could potentially triple its $1 billion valuation to $10 billion. Notably, for Kalshi, its rapid growth trajectory adds complexity to the regulatory challenges it ￰10￱ platform processed $441 million in trading volume during the first four days of the 2025 NFL season, with nearly $200 million on September 7 alone, which was one of its busiest periods since the 2024 presidential election.