Key Moments:
- First, a Suffolk Superior Court judge ruled that Massachusetts may block Kalshi from offering sports event contracts without complying with state betting laws.
- Next, the Attorney General’s office plans to seek an order barring Kalshi from entering new sports contracts with Massachusetts users, possibly starting Friday.
- Notably, court filings cited by reporters show that by May 2025, sports contracts accounted for about 70% of Kalshi’s revenue.
Court Decision Clears Path for State Enforcement
Massachusetts is now positioned to become the first U.S. state to force Kalshi to halt sports event contracts for residents. This development follows a ruling by Suffolk Superior Court Judge Christopher Barry-Smith.
Specifically, the judge determined that the state may prohibit Kalshi from offering sports-related contracts unless it complies with Massachusetts sports betting laws. As a result, the ruling opens the door for direct state enforcement.
Consequently, the Attorney General’s office can pursue a formal order stopping Kalshi from accepting new sports trades from Massachusetts users. If the court acts quickly, the ban could begin as soon as Friday.
Federal Regulation Argument Rejected
Kalshi argued that federal oversight under commodities law should shield it from state regulation. In particular, the company pointed to its supervision by the CFTC.
However, Judge Barry-Smith rejected that argument and called it “not compelling.” He added that Congress would have explicitly limited state authority if that had been the intent.
Meanwhile, the judge also downplayed Kalshi’s claims of financial harm. He noted that the company expanded into regulated states despite CFTC warnings and ongoing state actions.
Attorney General Emphasizes Compliance
Attorney General Andrea Campbell said the ruling sends a strong message to sports gaming companies operating in Massachusetts. According to Campbell, all operators must follow state rules without exception.
Additionally, she described the decision as a “major step” toward strengthening the state’s gambling framework. She also said it helps reduce risks tied to unlicensed betting.
Sports Contracts Face Regulatory Scrutiny
Originally, Kalshi focused on prediction contracts tied to economic data and major news events. Over time, however, sports contracts became central to its business.
By May 2025, court filings show that sports accounted for roughly 70% of the company’s revenue. As a result, regulators have increased scrutiny of these offerings.
Massachusetts argues that the contracts closely resemble traditional sports wagers. Therefore, the state says they fall under existing licensing requirements.
Additionally, Massachusetts taxes mobile sports betting revenue at 20%. This tax structure strengthens the state’s interest in enforcing compliance.
Timeline and Next Steps
The court has ordered Massachusetts to submit a proposed injunction by Wednesday. Importantly, the order must not cancel existing contracts.
Kalshi will then have until Friday to challenge the proposed terms. Ultimately, these deadlines will shape how the state regulates both new and existing sports trades.
| Date | Action | Details |
|---|---|---|
| Tuesday | Court Ruling | Judge Barry-Smith allows Massachusetts to block Kalshi’s sports contracts without state compliance. |
| Wednesday | State Deadline | Massachusetts must submit proposed injunction language that excludes existing contracts. |
| Friday | Potential Ban / Kalshi Response | The ban may begin if approved, while Kalshi can file objections by this date. |
Broader Implications for Trading and Sports Betting
Across the industry, the case is being closely watched. At its core, the dispute centers on whether sports event contracts are legitimate trading products or disguised sports betting.
If the injunction moves forward, other states may follow Massachusetts’ lead. As a result, regulators could pursue court action instead of relying solely on cease-and-desist notices.
- Author
Daniel Williams
