Massachusetts has taken formal legal action against Kalshi, the prediction market operator, for allegedly operating an unlicensed sports betting platform. Attorney General Andrea Campbell filed the lawsuit in Suffolk County Superior Court, claiming that Kalshi processed over $1 billion in sports wagers in the first half of 2025, with more than 75% of its volume derived from sports-related markets. The complaint highlights concerns that Kalshi offers a “digital gambling experience” and employs behavioral design mechanisms borrowed from gambling psychology, particularly following the launch of its parlay products.
This move adds Massachusetts to a growing list of states challenging Kalshi’s operations, including Maryland, Nevada, New Jersey, California, and Wisconsin. While the company has secured preliminary injunctions in Nevada and New Jersey, allowing it to continue operating as legal cases progress, other jurisdictions have imposed restrictions or investigations. The Massachusetts lawsuit intensifies the regulatory pressure on Kalshi, as state authorities aim to ensure compliance with existing sports betting laws and licensing requirements.
Kalshi’s business model, which combines prediction markets with sports event contracts, has raised concerns among regulators, given the similarities to traditional gambling platforms like DraftKings and FanDuel. These developments occur amid increasing oversight from both state regulators and federal bodies, including the Commodity Futures Trading Commission, which has warned about weak supervision in sports prediction markets.
The Massachusetts action signals a broader regulatory crackdown on operators blending prediction markets and sports wagering. As Kalshi navigates ongoing litigation and compliance challenges, the outcome of this case may set precedents for how prediction market platforms can operate within the evolving US legal landscape. The lawsuit underscores the importance of adhering to licensing requirements and regulatory standards in the growing sports betting sector.
