Massachusetts asks judge to halt Kalshi’s sports-prediction market amid regulatory clash
Massachusetts officials urged a state judge on Tuesday to block prediction-markets operator Kalshi from offering sports-related contracts to residents, arguing the company is running an unlicensed sports wagering business that targets consumers as young as 18.
During a hearing in Suffolk County Superior Court, Judge Christopher Barry-Smith pressed both sides on whether federal derivatives law could extend to bets on sports outcomes, a question at the centre of a widening national dispute over how event-contract platforms should be regulated.
A lay person, he said, would naturally wonder “how can that carry over and impact something as trivial as who wins a particular game?”
The state contends Kalshi’s sports markets constitute illegal gambling under Massachusetts law, despite the company’s claim that its contracts fall exclusively under the oversight of the U.S. Commodity Futures Trading Commission (CFTC). Assistant Attorney General Louisa Castrucci argued that Congress never intended sports outcomes to be regulated as financial derivatives.
“A sports wager by any other name is still a sports wager,” she told the court, adding that the CFTC’s authority over “swaps” under the 2010 Dodd-Frank Act was designed to address systemic financial risks, not sports betting.
Kalshi’s lawyer, Grant Mailand, countered that federal law preempts state oversight and that the company’s sports contracts operate within a framework governed solely by the CFTC. He said an injunction would be “massively disruptive to the market” and harmful to the New York-based company, which recently raised $1 billion at an $11 billion valuation.
Massachusetts is the first state to seek a court order halting Kalshi’s operations, though the platform is already facing litigation with six other states over similar allegations. The company also suffered a significant setback last month when a Nevada federal judge ruled that it is subject to that state’s gaming regulations, finding that sports matches do not legally qualify as “events” under federal law.
Castrucci urged the judge to bar Kalshi from offering sports contracts going forward, saying immediate intervention is needed to protect consumers and preserve the state’s regulatory authority. Kalshi maintains that blocking its markets would upend the broader event-contract ecosystem, which has grown rapidly as platforms test the boundaries between financial derivatives and gambling rules.
Judge Barry-Smith said he plans to issue a ruling in January.
https://www.yogonet.com/international/news/2025/12/11/116718-massachusetts-asks-judge-to-halt-kalshis-sportsprediction-market-amid-regulatory-clash