Kalshi faces new lawsuit from Massachusetts attorney general

The Massachusetts Attorney General’s Office filed a lawsuit against Kalshi on Friday, adding another state to the prediction market operator’s legal docket.

Attorney General Andrea Campbell filed the suit in Suffolk County Superior Court, alleging Kalshi is operating as an illegal sports betting platform. The suit said Kalshi took more than $1 billion in sports wagers in the first half of 2025 without appropriate licensing. The complaint notes more than 75% of Kalshi’s volume is on sports event markets.

“The figures suggest that Kalshi makes a larger percentage of its money from sports than DraftKings or FanDuel – businesses that are synonymous with sports betting in the US,” the suit reads.

The suit details how it claims Kalshi mirrors “a digital gambling experience” and “employs behavioural design mechanisms drawn from gambling psychology”. It also notes the platform recently began offering a parlay product and advertises itself as sports betting.

In March, the Massachusetts Secretary of the Commonwealth announced it was investigating Robinhood offering sports event contracts.

Kalshi faces strengthening headwinds

Kalshi began offering sports event contracts earlier this year. It has since seen growing scrutiny and legal action from regulators across the country.

Multiple states sent the platform cease-and-desist letters in the spring, including:

• Arizona
• Illinois
• Maryland
• Montana
• Nevada
• New Jersey
• Ohio

The Michigan Gaming Control Board opened investigations into sports prediction markets in April. The Tennessee Sports Wagering Council asked the federal Commodity Futures Trading Commission, which regulates trading contracts, to shut down sports prediction markets.

While the CFTC has allowed sports prediction markets this year, an outgoing commissioner recently warned of weak oversight during a farewell address.

As sports betting platforms like FanDuel begin forays into prediction markets, the Ohio Casino Control Commission has warned that if operators offer event markets, it could put their licences in jeopardy.

Prediction market lawsuit list grows

Kalshi has filed lawsuits against the regulatory bodies in Maryland, Nevada and New Jersey. The platform remains live in the states as the cases are in process.

In Nevada and New Jersey, the judges granted preliminary injunctions to Kalshi, with the states appealing the decisions. In Maryland, the judge sided with the state, but Maryland agreed to withhold enforcement with Kalshi appealing the decision.

Campbell was one of 34 state attorneys general who filed a brief in support of New Jersey in the appeals court.

In July, three California tribes filed a lawsuit against Kalshi, alleging the platform infringes on tribal rights under the Indian Gaming Regulatory Act. Last month, the Ho-Chunk Nation of Wisconsin sued the platform.

In October 2024, Kalshi won a suit in the US Court of Appeals against the CFTC, which allowed it to offer election event contracts ahead of the November ballot.