- A Massachusetts judge granted a preliminary injunction allowing state regulators to bar Kalshi from offering sports-related prediction markets in the state.
- The order is the first U.S. court injunction forcing a prediction market to comply with state gambling rules while a case proceeds.
- Kalshi contends it sells federally regulated event contracts overseen by the CFTC, not state sports bets.
- Sports-related markets account for over 80% of Kalshi’s business, with about $26 billion in trading volume on those markets, according to data from Dune.
- Legal pressure is growing internationally: Portugal and Hungary moved to ban Polymarket, and a legal expert suggested similar actions could follow, as noted in a tweet.
A Massachusetts judge on Tuesday allowed state regulators to temporarily bar Kalshi from offering sports-related prediction markets in the state, issuing a preliminary injunction that could take effect as soon as Friday. The state argues those markets are illegal, unregistered sports betting under state law; Kalshi says it provides event contracts regulated federally by the CFTC.
Judge Christopher Barry-Smith cited the company’s past and present marketing in explaining the decision. “Prior to March 2025, Kalshi referred to itself in advertisements as ‘the first nationwide legal sports betting platform,’” he wrote, and noted the company now calls itself a “regulated exchange dedicated to trading” where “investments [are] directly tied to the outcome of specific events.”
The judge added that “The manner in which Kalshi’s contracts are offered mirrors other digital gambling experiences.” Preliminary injunctions are issued only when a court finds factors such as a likelihood of success on the merits and potential harm support temporary relief, and Massachusetts argued those standards favor enforcement of state gambling law.
Sports-related wagers represent more than 80% of Kalshi’s total business, with roughly $26 billion in trading volume on those markets in just over a year, according to data from Dune. Industry observers said the ruling could spur more state actions against similar platforms.
The legal pressure on prediction markets extends beyond the U.S. On Friday, both Portugal and Hungary moved to ban Polymarket, accusing the platform of facilitating illegal gambling activity. Legal expert Daniel Wallach signaled further state challenges may follow in a tweet.
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