A Massachusetts judge on January 20 granted a preliminary injunction barring prediction-markets operator Kalshi from offering sports betting to residents of the state, concluding that its event contracts fall under state gambling laws. Suffolk County Superior Court Judge Christopher Barry-Smith approved the injunction at the request of Massachusetts Attorney General Andrea Joy Campbell, who alleged the platform was offering illegal sports wagering without the required license from the Massachusetts Gaming Commission. The court action represents a significant legal setback for Kalshi’s products in at least one major US market.
Kalshi has marketed its sports-related event contracts as prediction market offerings regulated federally by the US Commodity Futures Trading Commission. However, the judge rejected this defense and found that state gaming laws still apply to such services absent explicit preemption. The ruling underscored that Kalshi continued to operate in Massachusetts, knowing its model could conflict with local enforcement regimes, yet did so without securing a state license.
The decision could have implications beyond Massachusetts, as other states weigh legal and regulatory responses to prediction markets that resemble gambling. Kalshi faces similar legal challenges in multiple jurisdictions where regulators have argued the products constitute unlicensed betting. A hearing is scheduled to determine how the injunction will be implemented and whether it may be stayed pending appeal.
