Key Moments:
- Massachusetts Attorney General Campbell has filed a lawsuit against Kalshi, accusing the company of offering unlicensed sports betting products in the state.
- The Massachusetts Gaming Commission supports the lawsuit, citing consumer protection and responsible gaming concerns.
- Legal actions against Kalshi have also emerged in California, Wisconsin, and Nevada, amid continued company growth and product expansion.
Massachusetts Files Lawsuit Against Kalshi
Regulators in Massachusetts have taken decisive action against prediction market operator Kalshi, as Attorney General Andrea Joy Campbell initiated a lawsuit in Suffolk Superior Court on 12 September (Friday). The suit asserts that Kalshi has been operating sports-related event contracts similar to “Will [Team] win [Event]?” without the appropriate state license, allegedly constituting illegal sports wagering under Massachusetts law. This legal initiative is being jointly pursued with the Massachusetts Gaming Commission (MGC).
AG Campbell emphasized the importance of oversight in the sports wagering sector: “Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” said AG Campbell. “This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws.”
@MassAGO filed a lawsuit today against Kalshi for promoting and accepting online sports wagers from Mass customers without following the Commonwealth's laws and regulations. The MGC appreciates the AGO's efforts to enforce the law and hold companies accountable. pic.twitter.com/OChmYoX8R7
— MA Gaming Commission (@MassGamingComm) September 12, 2025
Regulatory and Industry Reactions
MGC Chair Jordan weighed in on the situation, highlighting parallels between Kalshi’s operations and established sportsbook offerings, with an emphasis on potential gaps in consumer protection. Maynard commented, “Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections… We appreciate the Attorney General’s efforts to enforce the law and hold these companies accountable.”
The lawsuit notes design features and promotional strategies on Kalshi’s platform that closely resemble those of sports betting sites, which regulators say heightens responsible gambling concerns. The Attorney General’s Office is seeking an injunction to suspend Kalshi’s sports contracts in Massachusetts while the case unfolds.
Various responsible gambling advocates have voiced worries about the rapid growth of unregulated event contracts. Keith Whyte, President of Safer Gambling Strategies LLC, stated for SiGMA News, “You can look at the clinical criteria for gambling addiction and substitute ‘trading’ for ‘gambling’—everything still fits.”
Kalshi, in response to SBC Americas, defended its operations by emphasizing its status as a federally regulated entity overseen by the Commodity Futures Trading Commission (CFTC). “Kalshi offers its users a fair, transparent, federally regulated, and nationwide marketplace,” the company said. “Rather than engage in dialogue with Kalshi as many other states have done, Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas.”
The company maintains that its event contracts do not constitute sports betting but are instead financial products that fall under the Commodity Exchange Act (CEA), not state gambling statutes.
Kalshi Faces National Legal Challenges
Massachusetts is the most recent of several jurisdictions to challenge Kalshi’s sports-related contracts. In July, three federally recognized California tribes—Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians—filed suit against Kalshi and Robinhood. The tribes allege the companies are disguising illegal sports betting as financial trading, in violation of the Indian Gaming Regulatory Act (IGRA) and tribal sovereignty.
The California tribes are seeking a court order to block Kalshi’s services on tribal lands and to stop advertising that the product is “legal in all 50 states.” They also demand an end to “sports betting” promotions, including campaigns targeting March Madness and, controversially, high schoolers.
A separate lawsuit in Wisconsin by the Ho-Chunk Nation also targets Kalshi and Robinhood for alleged racketeering and IGRA violations. Meanwhile, a Nevada District Court recently denied Kalshi’s attempt to avoid discovery in a state regulatory case, ordering further investigation into the legal classification of Kalshi’s contracts.
Business Expansion Despite Legal Setbacks
Kalshi has continued to grow even as litigation accumulates. The company recently established a multi-year partnership with European sports data supplier STATSCORE, aiming to enhance real-time offerings for major U.S. sports leagues such as the NFL, NBA, MLB, NHL, and NCAA.
CEO Tarek Mansour revealed the platform posted a record $441 million in trading volume during the opening week of the NFL season, including $200 million traded on Sunday alone. This uptick follows the rollout of parlay and prop-style contracts modeled on traditional sportsbook products.
| Event | Details |
|---|---|
| Lawsuit Filed | September 12 (Friday) in Suffolk Superior Court, Massachusetts |
| Trading Volume (NFL Opening Week) | $441 million total, $200 million on Sunday |
| Recent Partnership | STATSCORE (multi-year agreement for real-time sports data) |
| Other Legal Actions | Lawsuits in California (tribal plaintiffs), Wisconsin (Ho-Chunk Nation), and Nevada (state regulators) |
Federal Regulatory Discussion Approaches
Escalating legal action around prediction markets has prompted calls for greater regulatory clarity. On September 29, the Commodity Futures Trading Commission (CFTC) and U.S. Securities and Exchange Commission (SEC) are set to hold a joint roundtable to consider the legal framework for event contracts. Both agencies have previously indicated these products may require updated regulatory structures. Industry stakeholders are urging federal officials to offer definitive guidance.
- Author
Daniel Williams
