Massachusetts files lawsuit against Kalshi over unlicensed sports gambling

Massachusetts has filed a lawsuit against predictions platform Kalshi, accusing the company of offering unlicensed sports gambling under the guise of events contracts.

The lawsuit, filed in Suffolk County Superior Court on Friday, asks the court to block Kalshi from offering sports events contracts in the state while the case proceeds.

“If Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws,” Attorney General Andrea Joy Campbell said in a statement.

Massachusetts argues that Kalshi is profiting more from sports wagers than licensed operators such as DraftKings and FanDuel. According to the lawsuit, sports event wagers made up about 70% of Kalshi’s trading volume between Feb. 25 and May 17, rising to 75% after the company launched single-game March Madness markets on March 18. The filing alleges that during this period, Kalshi’s revenue from sports wagers outpaced that of licensed sportsbooks.

Kalshi maintains its contracts fall under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC), a federal agency that regulates prediction markets, and not state gaming regulators.

“Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas,” a company spokesperson said, adding that Kalshi is “ready to defend [its technology] once again in a court of law.”

Kalshi told CNBC last week that $439 million worth of wagers had been placed on NFL contracts through its platform. The company is also fighting legal challenges elsewhere, including a case in which it argued before the 3rd Circuit Court of Appeals after New Jersey sought to stop its operations.