Kalshi Faces Ban on Sports Event Contracts in Massachusetts

Kalshi is facing a preliminary injunction that may block it from including sports and related event contracts on its prediction market in Massachusetts.

Massachusetts Attorney General Andrea Joy Campbell secured the preliminary injunction in a lawsuit against the company Tuesday (Jan. 20), she said in a press statement.

The preliminary injunction will prohibit Kalshi from accepting those contracts from customers in the state until the company is licensed by the Massachusetts Gaming Commission (MGC) and adheres to other state laws governing sports gaming, according to the statement.

“The Court has made clear that any company that wants to be in the sport gaming business in Massachusetts must play by our rules — no exceptions,” Campbell said. “Today’s victory marks a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gaming.”

Reached by PYMNTS, Kalshi declined to comment on the preliminary injunction.

According to the Office of the Attorney General’s press statement, Campbell filed the lawsuit in September, alleging that Kalshi’s event contracts are actually sports wagering and that the company has neither applied for nor received a sports wagering license from the MGC.

Reuters reported Tuesday that a hearing scheduled for Friday (Jan. 23) will determine how the ban will be implemented and whether it will be paused if the company appeals the injunction.

The judge presiding over the case said that the injunction will be designed to minimize the impact on Kalshi’s business while requiring it to comply with state law, according to the report.

While Kalshi is engaged in legal battles with several states, this is the first case in which its operations in a state have faced an injunction, the report said.

Kalshi’s lawyers have argued that its sport event contracts are not subject to state gaming laws, because the contracts are overseen only by the U.S. Commodity Futures Trading Commission (CFTC), per the report.

PYMNTS reported in December that prediction markets are the latest flash point between federal and state regulators. While real-money prediction markets technically fall under the jurisdiction of the CFTC, a growing number of states have sought to shut down those they view as unlicensed or illegal gambling operations.

Kalshi raised $1 billion in a Series E funding round in December, saying it would expand its prediction market platform by accelerating consumer adoption, integrating more brokerages, adding new partnerships and broadening its product offerings.