Massachusetts court ruling prohibits prediction market Kalshi platform sports betting business
A Massachusetts judge ruled on Tuesday that the state government has the authority to prohibit the emerging prediction market platform Kalshi from offering sports betting services in its state, with the ban set to take effect as early as this Friday.
If the ruling is implemented, it will be the first state-level ban in the United States against such prediction market platforms.
This ruling stems from the state attorney general's accusation last September that Kalshi was operating a sports betting business without the necessary state license, in violation of local regulations.
Kalshi's defense argument is that, as a "event contract" market regulated by the U.S. Commodity Futures Trading Commission (CFTC), it should be subject to federal regulations rather than state-level market bans.
The judge noted in the ruling that Kalshi, knowing that there are regulatory requirements in various states and that the CFTC had warned it to act cautiously, still expanded its business into states that require a betting license, thus actively assuming risk and therefore must comply with local laws.
Analysts believe this move may pose a significant blow to Kalshi. Its sports betting business, which launched in January 2025, has become a core growth driver, contributing approximately 70% of the company's revenue. This defeat will not only immediately cost it the Massachusetts market but may also prompt other states to take similar regulatory follow-up actions.
In summary, the core conflict in this case lies in how to delineate federal and state regulatory authority when prediction markets are included in the highly regulated sports betting sector, directly addressing a key obstacle in the field of fintech innovation.
Although the judge's "state rights" ruling casts a pause on the prediction market, it may just be the beginning of a long-term game regarding innovation, regulation, and jurisdiction.
Kalshi's responses to the upcoming legal rulings, as well as whether the CFTC will further coordinate with state regulatory agencies on this issue, will also become a focal point of attention in the industry.