Massachusetts Attorney General Andrea Joy Campbell has filed a lawsuit against prediction markets platform KalshiEX, accusing it of running unlicensed sports betting. The case, filed September 12 in Suffolk Superior Court, alleges Kalshi sidesteps the Massachusetts Gaming Commission’s (MGC) strict licensing framework while offering sports wagers under the guise of “sports events contracts.”
MGC Chairman Jordan Maynard backed the legal action, warning that prediction market firms are “expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections.”
Why Massachusetts Says Kalshi Violates the Law
AG Campbell argues that Kalshi’s “yes/no” event contracts are indistinguishable from sports wagers. She stressed that sports betting carries risks of addiction and financial harm, requiring strict regulation to protect consumers. Licensed operators undergo background checks, financial oversight, and must offer responsible gambling tools—requirements Kalshi allegedly ignores.
What the Lawsuit Claims About Kalshi’s Business
The complaint says Kalshi promotes its betting products through TV, social media, and even retail platforms like Robinhood. The AG asked the court to halt its Massachusetts operations immediately while litigation continues. Regulators argue the platform bypasses consumer safeguards and avoids taxes owed by licensed competitors.
Meanwhile, state lawmakers are eyeing broader reforms. Representative David Muradian’s HB 4431, introduced August 20, would ban online games simulating casino or sports betting that use dual-currency systems.
What This Means for Prediction Market Oversight
The case highlights growing friction between prediction markets and gambling regulators. Kalshi insists it offers financial contracts, not gambling, but Massachusetts is challenging that claim directly. A win for the state could set a precedent for how other jurisdictions treat sports-related prediction platforms.
“If Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws,” Campbell said. The MGC signaled ongoing collaboration with the AG’s office, suggesting more enforcement actions may be on the horizon.
