Massachusetts gives Kalshi 30 days to cease sports wagering operations

• Judge Christopher Barry-Smith has denied Kalshi’s emergency request to pause a preliminary injunction blocking sports event contracts in Massachusetts.
• The prediction market platform has 30 days from 6 February to comply with the order requiring it to cease sports wagering operations without a state gaming licence.
• Massachusetts Attorney General Andrea Joy Campbell secured the injunction, arguing Kalshi operates as an unlicensed sports betting enterprise in violation of state law.

Prediction market operator Kalshi has 30 days to pull its sports contracts from Massachusetts after a state judge on Friday denied the platform’s bid to halt enforcement of a preliminary injunction.

Judge Christopher Barry-Smith rejected Kalshi’s argument that the financial harm to its business justifies delaying compliance, ruling instead that Massachusetts’ regulatory authority over sports wagering takes precedence.

The 6 February decision intensifies a growing clash between state gaming regulators and prediction market operators across multiple US jurisdictions.

Platform to appeal federal preemption argument

The dispute centres on whether Kalshi’s products fall under state gambling regulation or federal commodity trading oversight.

Kalshi operates as a federally regulated exchange under the Commodity Futures Trading Commission (CFTC) and argues that its sports contracts are financial products governed by federal law, not state gambling regulations.

Barry-Smith dismissed this preemption argument in his 20 January preliminary injunction ruling, noting Kalshi understood the regulatory risks when designing its business model.

“Kalshi adopted its business model – relying on CFTC regulation of ‘swaps’ to offer nationwide sports betting in contravention of state gaming laws – with eyes wide open,” the judge wrote in his order.

“It plainly must have appreciated the risk – or likelihood – of an order like this preliminary injunction. Being a sophisticated entity, it presumably prepared for that risk.”

The judge confirmed that Kalshi can appeal to a higher court to have the injunction lifted while the legal battle continues.

State argues platform violates gaming laws

Barry-Smith last month agreed with Massachusetts Attorney General Andrea Joy Campbell that by allowing residents to place bets on sporting event outcomes, Kalshi operates as an unlicensed sports wagering enterprise.

Campbell filed the lawsuit in September 2025, arguing the platform violates state laws including regulations prohibiting anyone under 21 from betting on match outcomes.

Gaming regulators contend companies like Kalshi offer unlicensed sports wagers in violation of state laws and consumer protection requirements. Licensed sports betting operators in Massachusetts must comply with strict regulations, including age restrictions and oversight from the Massachusetts Gaming Commission.

“Today’s ruling affirms Massachusetts’ right to enforce our gambling laws and hold all operators who wish to offer sports wagers in our state accountable,” Campbell said in a statement following the decision.

The New York-based platform will need to implement measures to prevent Massachusetts residents from accessing sports event contracts by early March. The restriction applies specifically to sports-related offerings; Kalshi’s non-sports prediction markets remain unaffected by the injunction.

Broader regulatory conflict across multiple states

The Massachusetts case forms part of a wider legal battle between prediction market operators and state gaming regulators across the United States.

The Massachusetts Gaming Commission previously prohibited licensed sportsbooks from offering prediction markets, establishing the state’s position that such products require separate regulatory approval.

Gaming authorities in multiple jurisdictions have challenged platforms offering sports-related contracts, arguing they constitute unlicensed sports betting regardless of federal commodity derivatives regulation.

In a related development, Robinhood sued Massachusetts regulators over restrictions on sports prediction markets, highlighting the broader industry tension over regulatory jurisdiction.

What this means for the industry

The Massachusetts ruling could set an important precedent for prediction markets nationwide. If other state courts follow this decision, platforms like Kalshi will need to obtain gaming licences in each state where they operate sports contracts. This would create significant compliance costs and operational complexity.

On the other hand, if Kalshi wins on appeal and courts rule that federal CFTC oversight trumps state gaming laws, it would effectively allow prediction markets to operate across all states without local licences. This outcome could reshape state regulators’ ability to control sports betting within their borders.

Industry watchers expect this dispute to eventually reach the US Supreme Court, given the fundamental question of whether federal or state law takes priority.

The case carries major implications for licensed sportsbook operators as well, who argue prediction markets gain an unfair competitive advantage by avoiding state taxes, licensing fees and consumer protection requirements.

Kalshi has 30 days to block Massachusetts users from its sports contracts or seek emergency relief from an appeals court.