In response, Massachusetts has asked a judge to block Kalshi from operating its sports-prediction market, contending the platform functions as unlicensed sports gambling in violation of the state’s regulations governing wagering activities.
The state filed a lawsuit seeking an immediate injunction—the first legal action beyond a simple regulatory warning—against Kalshi's prediction platform.
Officials claim that Kalshi's so-called event contracts run just like sports bets and must be subject to proper state-issued licenses for gambling.
Massachusetts claims that Kalshi enables users below 21 years and lacks fundamental protections, presenting risks emanating from unregulated online gambling platforms.
Kalshi still argues that its markets represent federally regulated financial contracts and for that reason are exempt from state wagering restrictions.
Federal rules regulating the operation of prediction markets consider sporting events to be financial events, but courts in several states have called that into question.
Several U.S. states have demanded that Kalshi stop operations, hinting at the rising tide of national skepticism regarding its adherence to gambling laws.
The state argues that the issues at stake are consumer safety and clarity of legal standards, and that the ruling is likely to impact markets across the country.
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