Massachusetts Judge Orders Kalshi to Stop Sports Betting Operations

TLDR

• A Massachusetts judge ruled to issue a preliminary injunction against Kalshi, barring the platform from offering sports betting in the state without a gaming license.
• Suffolk County Superior Court Judge Christopher Barry-Smith made the ruling after Massachusetts Attorney General Andrea Joy Campbell filed a lawsuit in September alleging illegal sports wagering.
• The judge stated the injunction would prohibit Kalshi from offering sports-related event contracts without required licensing under Massachusetts Sports Wagering Law.
• Kalshi has until Friday to respond to the state’s proposed injunction terms, which must not derail existing user contracts.
• The ruling is part of broader regulatory scrutiny facing prediction markets platforms across multiple US states and from federal lawmakers.

A Massachusetts judge has ruled to block prediction markets platform Kalshi from offering sports betting in the state. The decision came after state officials argued the platform was operating without proper licensing.

Suffolk County Superior Court Judge Christopher Barry-Smith issued the ruling on Tuesday. The judge said he would issue a preliminary injunction against Kalshi this week. The platform must stop offering sports-related event contracts without a required gaming license.

The legal action started in September when Massachusetts Attorney General Andrea Joy Campbell filed a lawsuit. Campbell accused Kalshi of offering illegal and unsafe sports wagering. The Tuesday injunction came at Campbell’s request.

Judge Barry-Smith stated that requiring Kalshi to obtain proper licensing serves the public interest. The court set a timeline for implementing the injunction. The state must propose its injunction terms by Wednesday in a way that protects existing user contracts.

Kalshi has until Friday to respond to the state’s proposal. The judge plans to formally order the halt at the end of the week. The platform still has a window to request stays or delays.

Timeline and Legal Process

The court’s decision follows months of legal proceedings. Massachusetts authorities targeted Kalshi for offering binary contracts on sports outcomes. These contracts allow users to bet on whether specific events will happen.

Prediction markets have grown in popularity over recent years. Platforms like Kalshi and Polymarket offer event contracts on various subjects. These range from US politics to European sporting events.

Kalshi did not immediately respond to requests for comment. The company has not issued a public statement about the Massachusetts ruling.

Wider Regulatory Challenges

The Massachusetts case represents one of several legal challenges facing prediction markets platforms. Multiple US states and federal lawmakers have taken action against these largely unregulated platforms.

Kalshi won a legal victory against the US Commodity Futures Trading Commission in 2024. That case involved bets on election outcomes. Despite that win, prediction markets continue to face scrutiny from lawmakers.

Regulatory attention increased in January after a Polymarket user reportedly earned over $400,000 on a contract. The contract involved the potential removal of Venezuelan President Nicolás Maduro. The incident prompted allegations of insider trading.

The Massachusetts ruling specifically targets sports betting operations. The state requires platforms to obtain gaming licenses before offering sports wagering. Kalshi operated without this required licensing.

Judge Barry-Smith’s ruling emphasized the importance of proper licensing. The decision aims to ensure prediction markets platforms follow state gambling laws. Massachusetts joins other states taking legal action to regulate these platforms.

The preliminary injunction will take effect by the end of this week. Existing contracts on the platform will need protection under the terms. The state and Kalshi must negotiate how to handle current user positions.

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