Multi-state brief backs Massachusetts in Kalshi case
A coalition of 38 state attorneys general has filed an amicus brief backing Massachusetts in its legal battle against prediction market operator Kalshi.
According to a report by the Arizona Capitol Times, the brief argues that the Massachusetts case could affect states’ ability to enforce their own gambling laws and protect consumers. The attorneys general maintain that state regulators have long overseen betting activity, including sports wagering, and warn that Kalshi’s legal arguments risk undermining that authority.
The group, referred to as the “amici States,” stated that gambling regulation has historically fallen within state jurisdiction. They argued that Kalshi’s position, that its contracts should be treated as financial instruments regulated at the federal level, could weaken state-level protections.
The brief was led by Nevada Attorney General Aaron Ford and Ohio Attorney General Dave Yost, with support from a broad coalition spanning states where sports betting is both legal and prohibited. The filing also highlights concerns that Kalshi has continued offering contracts in jurisdictions where sports betting remains illegal.
Sports wagering has been permitted in most U.S. states since the Supreme Court lifted the federal ban in 2018, but it is still outlawed in 19 states.
Massachusetts Attorney General Andrea Campbell initiated the lawsuit against Kalshi in September 2025, marking the first time a state had taken legal action against a prediction market operator. A preliminary injunction was granted in January 2026, halting Kalshi’s sports-related contracts in the state. However, an appeals court later issued an emergency stay, allowing the company to resume operations while the case proceeds.
Kalshi, headquartered in New York and registered with the Commodity Futures Trading Commission (CFTC), insists its platform does not constitute gambling. The company argues that it operates as a regulated derivatives exchange, placing it under federal, rather than state, gaming laws.
State regulators have pushed back, with Kalshi now involved in more than 30 legal disputes across the U.S. The case has become a focal point in the broader debate over how emerging betting-like financial products should be classified and supervised.
CFTC action and state lawsuits deepen regulatory divide
The legal clash has widened beyond Massachusetts, with federal and state authorities taking competing positions on enforcement.
On the same day the amicus brief was filed, the CFTC launched a lawsuit in the U.S. District Court for the Southern District of New York seeking to block state-level action against prediction market firms. At the same time, New York Attorney General Letitia James has taken action against major crypto-linked platforms, suing Coinbase and Gemini for allegedly operating illegal gaming enterprises.
Tighter gambling rules eyed in Massachusetts
The Massachusetts case is unfolding against a backdrop of proposed tighter gambling rules in the state. Lawmakers are currently considering Senate Bill 302, introduced earlier this year, which would impose stricter limits on sports betting.
The bill proposes banning in-play and proposition bets, introducing daily and monthly wagering caps, and raising the tax rate on operators. If passed, the legislation would represent one of the most restrictive betting frameworks in the U.S. Critics, however, warn that excessive restrictions could drive consumers towards unregulated platforms.
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