Kalshi faces new Massachusetts claims over sports contracts

Massachusetts can add new claims against Kalshi as the state challenges the platform’s sports event contracts.

A Suffolk County Superior Court judge allowed Massachusetts authorities to file a 71-page amended complaint against Kalshi. Associate Justice Peter Krupp granted the request on Tuesday, letting the state add claims to its case over alleged unlawful sports wagering.

The amended complaint says Kalshi targets users under 21 and does not do enough to stop them from using the platform. The filing cites marketing on university campuses and ads showing people who appear younger than 21. 

“Kalshi allows anyone who is at least 18 years old to create an account and wager on sports events by purchasing event contracts,” Massachusetts authorities alleged.

State says Kalshi needs a license

Massachusetts Attorney General Andrea Joy Campbell first sued Kalshi in September 2025, accusing the company of accepting online sports wagers without following state gaming laws. The Massachusetts AG’s office said Kalshi needed a license from the Massachusetts Gaming Commission before offering sports-related products to residents.

A judge later granted a preliminary injunction that blocked Kalshi from offering sports event contracts in Massachusetts while the case moved forward. The AG’s office said the order barred Kalshi from accepting online sports wagers and related event contracts from Massachusetts customers unless it complied with state sports gaming laws.

Kalshi has argued that its products fall under federal derivatives law, not state betting rules. The company says it operates as a CFTC-regulated exchange and offers event contracts rather than traditional sportsbook wagers. Massachusetts authorities reject that view and argue that sports outcome contracts still function as sports betting under state law.

CFTC backs federal oversight

The U.S. Commodity Futures Trading Commission has supported Kalshi’s federal-law argument in court. The agency said it has exclusive authority over prediction markets and that event contracts qualify as swaps under the Commodity Exchange Act.

“Congress has entrusted the CFTC with the sole authority to regulate commodity derivatives markets, including prediction markets,” CFTC Chair Michael Selig said. “To any state that seeks to nullify federal law and seize authority over these markets, I say again: we will see you in court.”

The Massachusetts case is part of a broader legal fight involving prediction market platforms and state gaming authorities. A Michigan judge recently blocked Kalshi from allowing residents to place sports bets after state officials accused the company of violating gaming laws. Similar disputes have also reached other jurisdictions.

Congress faces pressure on prediction markets

As previously reported by crypto.news, U.S. gaming groups have urged lawmakers to block sports and casino-style prediction markets from CFTC oversight through the CLARITY Act. The groups said platforms offering sports event contracts bypass state and tribal gaming laws by presenting the products as financial contracts.

As reported earlier by crypto.news, sports-related contracts remain Kalshi’s largest product category, accounting for about 65% of total volume, according to company data. That growth has drawn more attention from courts, lawmakers and regulators as the company expands beyond its original event-market model.

Previously, crypto.news reported that the CFTC was preparing a new framework for reviewing prediction market contracts. The plan could bring closer review to sports, political and other real-world event contracts. For Kalshi, the Massachusetts amended complaint adds another state-level case to a national dispute over who controls sports prediction markets.