Kalshi facing ban in Massachusetts after court issues injunction
Prediction markets platform “well understood” its business model came into direct conflict with state laws, judge rules
A Massachusetts judge has ruled Kalshi cannot offer sports-related event contracts within the state without a gaming licence, in what marks a major escalation in regulatory attempts to curb the growth of prediction platforms.
On Tuesday (January 20), Suffolk County Superior Court Judge Christopher Barry-Smith granted a preliminary injunction against Kalshi at the request of Massachusetts Attorney General (AG) Andrea Joy Campbell.
In a lawsuit, filed in September, Campbell accused Kalshi of offering what amounts to unlicensed sports wagering to users as young as 18, in clear violation of state gambling rules (21+).
In his ruling, Barry-Smith rejected Kalshi’s core legal defence that the Commodity Futures Trading Commission (CTFC)’s federal oversight of derivatives preempts state gaming laws, concluding that Congress never intended to displace traditional state authority over gambling.
Barry-Smith wrote: “Kalshi knowingly proceeded in Massachusetts and other states that require sports wagering entities to be licensed, even after the CFTC warned it to be cautious in light of ongoing state enforcement efforts.
“There can be little question that Kalshi well understood that its business model – especially once it began offering bets on sporting events – came into direct conflict [with] state enforcement regimes; Kalshi chose to take that risk head on.”
Responding to the ruling, AG Campbell said: “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.
“This victory marks a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling.”
Kalshi must comply with the court order requiring the company to halt its offering of sports-related contracts in the state, potentially as soon as Friday (January 23).
The New York-based firm, which began offering sports event contracts nationally in early 2025 and saw those products quickly dominate its trading volume, is expected to appeal the injunction.
While the Massachusetts ruling marks the first instance of a state obtaining a judge-ordered injunction to curb a prediction market platform’s activity, there has been a wave of state-level action against the key operators.
Recent moves include regulators in Tennessee issuing cease-and-desist orders targeting Kalshi, Polymarket and Crypto.com, demanding that all sports-related prediction contracts be halted and unsettled positions refunded.
Connecticut issued similar orders in late 2025 to Kalshi, Robinhood, and Crypto.com.
The Nevada Gaming Control Board, meanwhile, has filed a civil enforcement lawsuit against Polymarket.
On Tuesday, January 20, DAZN and Polymarket announced a partnership that involves Polymarket’s data being displayed within the sports streaming company’s platform.
DAZN has also applied to the CFTC for licenses to allow users to trade Polymarket’s markets via DAZN itself.