Kalshi, a prediction market platform, is facing a preliminary injunction that could prevent it from offering sports and related event contracts in Massachusetts. On January 20, 2024, Massachusetts Attorney General Andrea Joy Campbell announced that she secured the injunction in a lawsuit against the company. This legal action will prohibit Kalshi from accepting contracts from customers in the state until it obtains the necessary licensing from the Massachusetts Gaming Commission (MGC) and complies with other relevant state regulations governing sports gaming.
In her statement, Campbell emphasized the importance of compliance, stating, “The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules — no exceptions.” She described the ruling as a significant step toward strengthening Massachusetts’ gambling laws and addressing the potential public health risks associated with unregulated gaming.
Kalshi has not publicly commented on the injunction, according to a report by PYMNTS. The lawsuit, filed in September 2023, alleges that Kalshi’s event contracts constitute sports wagering. The company reportedly has neither applied for nor received a sports wagering license from the MGC.
A hearing is scheduled for January 23, 2024, to determine the specifics of how the injunction will be enforced and whether it will be paused if Kalshi chooses to appeal. The presiding judge indicated that the injunction aims to limit the impact on Kalshi’s operations while ensuring compliance with state law.
This case marks the first instance in which Kalshi’s operations have faced an injunction in any state, although the company is currently engaged in legal disputes with several others. Kalshi’s legal team argues that its sports event contracts are not subject to state gaming laws, asserting that the contracts fall under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC).
The growing landscape of prediction markets has become a contentious issue between federal and state regulators. While real-money prediction markets generally come under CFTC oversight, numerous states are moving to shut down operations they deem unlicensed or illegal gambling platforms.
In December 2023, Kalshi raised $1 billion in a Series E funding round. The company announced plans to enhance its prediction market platform by increasing consumer adoption, integrating additional brokerages, forming new partnerships, and expanding its product offerings. As the legal landscape evolves, Kalshi’s future in Massachusetts and beyond remains uncertain.
