Kalshi Vows to Fight Massachusetts Lawsuit Over Prediction Markets
Massachusetts sues Kalshi over unlicensed sports betting while Polymarket eyes US comeback
Prediction market platform Kalshi has vowed to fight back against a lawsuit filed by the Commonwealth of Massachusetts, which accuses the company of illegally offering unlicensed sports betting under the guise of “event contracts.” The lawsuit, filed in Suffolk County Superior Court, claims that as of May 2025, more than three-quarters of Kalshi’s trading activity comes from sports-related markets—reportedly a bigger share than industry leaders DraftKings and FanDuel.
A Kalshi spokesperson strongly rejected the accusations, stating that prediction markets are a vital innovation of the 21st century and should be accessible to all Americans. The company emphasized that it is federally regulated by the Commodity Futures Trading Commission (CFTC), arguing that state gambling laws do not apply. “Rather than engage in dialogue with Kalshi as many other states have done, Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas,” the spokesperson said.
The case adds to Kalshi’s mounting legal challenges, as it has already faced cease-and-desist orders from states including Arizona, Montana, Ohio, and Illinois. Despite the hurdles, the platform remains firm in defending its model in court, framing the issue as a fight for innovation versus outdated regulation.
Meanwhile, the spotlight on prediction markets is intensifying as blockchain-based rival Polymarket is reportedly preparing to launch in the United States. According to Business Insider, Polymarket is seeking new funding that could potentially value the company as high as $10 billion, far above its $1 billion valuation in June. CEO Shayne Coplan recently announced that the CFTC has given Polymarket the green light to operate in the US, signaling a potential game-changing shift in the industry.
The clash between state regulators and federally regulated platforms could reshape the future of prediction markets in the US, raising questions about innovation, legality, and the boundaries of gambling regulation.
