Attorney General Andrea Campbell filed the complaint in Suffolk County Superior Court on Friday, alleging that Kalshi processed over $1 billion in sports wagers during the first half of 2025 without proper licensing authorization. The lawsuit states that sports event markets represent more than 75% of Kalshi’s total trading volume.
"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 legal filing states.
Platform Operations Under Scrutiny
The Massachusetts complaint describes Kalshi’s operations as mirroring "a digital gambling experience" and employs behavioral design mechanisms drawn from gambling psychology. The lawsuit notes that the platform has recently introduced parlay betting products and markets itself as a sports betting service.
This legal action follows a March announcement by the Massachusetts Secretary of the Commonwealth regarding an investigation into Robinhood’s sports event contract offerings.
Multi-State Regulatory Opposition
Kalshi faces mounting regulatory pressure across multiple jurisdictions since launching sports event contracts earlier this year. Several states have issued cease-and-desist orders against the platform, including Arizona, Illinois, Maryland, Montana, Nevada, New Jersey, and Ohio.
The Michigan Gaming Control Board opened investigations into sports prediction markets in April, while the Tennessee Sports Wagering Council requested federal intervention from the Commodity Futures Trading Commission to shut down sports prediction markets entirely.
Ongoing Legal Battles
The prediction market operator has filed counter-lawsuits against regulatory bodies in Maryland, Nevada, and New Jersey, with operations continuing in these states pending legal resolution. Courts in Nevada and New Jersey have granted preliminary injunctions favoring Kalshi, though both states have appealed these decisions. Maryland’s case resulted in a state victory, but enforcement has been suspended while Kalshi appeals.
Campbell joined 33 other state attorneys general in filing court briefs supporting New Jersey’s position in the appeals process.
Tribal Gaming Challenges
Beyond state regulatory action, Kalshi faces additional legal challenges from tribal gaming interests. Three California tribes filed suit in July, alleging platform operations infringe on tribal rights under the Indian Gaming Regulatory Act. The Ho-Chunk Nation of Wisconsin filed similar claims in December.
Despite regulatory headwinds, Kalshi secured a significant legal victory in October 2024 when the US Court of Appeals ruled against the CFTC, allowing the platform to offer election event contracts before the November elections.
The Massachusetts case represents the latest development in an ongoing regulatory battle that could determine the future of sports prediction markets in the United States gaming landscape.
