Massachusetts Sues Kalshi Over Alleged Unlawful Sports Betting

The lawsuit claims the platform has processed billions in wagers, with sports contracts making up as much as three-quarters of its overall trading volume in 2025Image Source: Shutterstock.com

Massachusettshas launched a civil lawsuit against Kalshi, a prediction market platform. The state claims the company runs what boils down to unlicensed sports bettingunder the guise of “event contracts.” Attorney General Andrea Joy Campbellfiled the case on Friday in Suffolk Superior Court. The lawsuit aims to stop Kalshi’s sports markets in Massachusettsand seek money penalties.

Attorney General Campbell Tries to Stop Kalshi in Massachusetts Claiming Illegal Betting

The complaint states that the platform has handled wagers worth billions, with sports-related contracts accounting for up to 75% of its total trading activity this year. State officials claim these offerings are similar to traditional sports bets, such as moneylines, point spreads, and over/under wagers, but they do not meet licensing requirements, consumer protections, or tax obligations that regulated operators such as DraftKingsand FanDuelmust follow, reported CNBC.

Regulators in Massachusettspointed out several issues, including the company’s choice to allow 18-year-olds to trade on sports outcomes even though the state sets the legal betting age at 21. They also criticized Kalshifor its limited tools to promote responsible gaming, noting that features like deposit limits and time-out periods were not available until early 2025.

Campbell’s officestated the lawsuit aims to safeguard the public from dangers linked to uncontrolled gambling. The legal action asks the court to stop Kalshi from operating in Massachusettsas the case proceeds.

Kalshi Claims CFTC Oversight Protects It From State Gambling Laws

Kalshi has stood by its approach, saying it differs from sportsbook betting. The company claims it runs an exchangewith federal oversightwhere users trade contracts with each other, not bet against a bookmaker. It highlights the Commodity Futures Trading Commission’s (CFTC)supervision to prove its legality and argues that federal rules should ngake precedence over state limits.

In a statement, Kalshisaid Massachusettsis using old interpretations of gambling law to stop what the company sees as a financial breakthrough. Leaders said prediction markets give a clear and nationwide option to regular betting, and promised to fight the lawsuit in court.

The argument shows a growing clash between states and prediction platformsabout where to draw the line. At least seven other states have told Kalshito stop its sports offerings, making the company sue in Nevada, New Jersey, and Maryland. While Kalshihas won in some places, other fights are still going on.

The timing also lines up with Kalshi’s quick growth. Sources say the platform handled bets worth hundreds of millions of dollars in the first week of the 2025 NFL season. Its trading volumes were on par with those of big-name sportsbooks.

People who follow the industry claim the company wants new investment that could boost its value to over $5 billion. Massachusetts’ legal actionnow puts the state at the heart of a nationwide argument. The debate centers on whether prediction markets are a new type of financial tool or just another form of sports betting that should follow local licensing rules.