Kalshi sued by the state of Massachusetts for illegal sports gambling

The state of Massachusetts has filed a lawsuit against prediction market platform Kalshi for allegedly offering unlicensed sports gambling.

The lawsuit was filed in Massachusetts state court on Friday (September 12), claiming that Kalshi had offered illegal sports gambling bets without a license disguised as event contracts. In a press release published by State Attorney General Andrea Joy Campbell, the allegations claim that Kalshi is making more money on sports bets than legal licensed sportsbooks and event contracts.

The Massachusetts Attorney General is going for the jugular here, seeking not just a preliminary and permanent injunction against Kalshi, but also monetary damages and civil penalties, which, under the statute, are assessed at $5,000 "for each violation." Ka-ching. pic.twitter.com/yQcXLIoKTW

— Daniel Wallach (@WALLACHLEGAL) September 13, 2025

“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” said AG Campbell.

“This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws. I am grateful for the ongoing partnership with the Gaming Commission.”

AG Campbell is requesting that Kalshi cease all sports wagering on the platform while the lawsuit is pending. The lawsuit argues that the event contracts offered by the platform resemble sports bets too closely, promoted to Massachusetts residents via TV ads and social media. ‘Trading’ is offered via platforms like Robinhood.

Kalshi has not applied for a Massachusetts sports wagering license from the Massachusetts Gaming Commission, as required by law. However, a growing focus on sports-related contracts has been noticed on the platform in recent months, marked by a partnership with NFL on Fox.

“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections,” said Massachusetts Gaming Commission Chair Jordan Maynard.

“My fellow commissioners and I appreciate the Attorney General’s efforts to enforce the law and hold these companies accountable to Massachusetts’ rigorous standards. We look forward to our continued partnership with Attorney General Campbell and her office.”

What’s wrong with Kalshi’s alleged sports gambling?

As well as lacking the proper licenses for sports gambling, the AGO also alleged that Kalshi’s alleged sports gambling service side-step important consumer protections that licensed operators must adhere to. For example, Kalshi allows users between the ages of 18 and 21 years old to use its platform, when the legal age for sports gambling in Massachusetts is 21.

There are also no safeguards or gambling-related harm messaging, as required with traditional betting platforms. Kalshi does not offer self-limiting options to Massachusetts users, like appropriate maximum deposits or maximum wagers, in line with industry compliance.

Readwrite has reached out to Kalshi for comment.

Featured image: Wikimedia Commons, licensed under CC BY 2.0

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