Massachusetts can bar prediction market Kalshi from offering sports betting in the state, a judge ruled on Tuesday.
A ban could take effect as early as Friday. If it does, it would be the first such ban in the US, according to Daniel Wallach, a professor at the University of New Hampshire and an expert on the law of sports gambling.
“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,” Massachusetts Attorney General Andrea Campbell said in a statement.
“Today’s victory marks a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling.”
Kalshi did not return DL News’ request for comment.
While prediction markets such as Kalshi and Polymarket originally offered bets on economic indicators and world events, they eventually branched into sports betting.
Kalshi first offered sports betting in January 2025. By May of that year, sports accounted for 70% of the company’s revenue, according to court documents.
That move has helped fuel Kalshi’s rapid growth, which saw the company strike partnerships with retail trading platforms like Robinhood and Coinbase. But Kalshi has found itself in a multi-front legal battle against states that require sports gambling platforms to seek licensure.
Campbell sued Kalshi in September, alleging the prediction market was offering unlicensed sports wagering in Massachusetts. Sports wagering revenue in the state is subject to a 20% tax if it comes from mobile bets.
Kalshi fought the lawsuit, arguing prediction markets were regulated by the Commodity Futures Trading Commission. As such, Massachusetts didn’t have the authority to prevent the company from offering sports wagers, it argued.
Massachusetts Judge Christopher Barry-Smith said the argument was “not compelling.”
If federal law prevented states from regulating companies such as Kalshi, Congress would have made that clear, Barry-Smith wrote in his order.
The judge also dismissed Kalshi’s argument that a Massachusetts ban could be ruinous.
Kalshi chose to expand to states with licensing requirements “even after the CFTC warned it to be cautious in light of ongoing state enforcement efforts,” the judge noted. “Kalshi chose to take that risk head-on.”
Barry-Smith gave Massachusetts a Wednesday deadline to submit a proposed ban that does not attempt to unwind preexisting event contracts. Kalshi has until Friday to dispute the proposal, the judge said.
Kalshi raised a $300 million Series D round at a $5 billion valuation in October.
Sequoia and Andreessen Horowitz led the prediction market’s raise, with participation from other investors, including CapitalG, Coinbase Ventures, General Catalyst, and Spark Capital.
