Kalshi braces for Massachusetts suspension on 22 January
A Massachusetts judge has ruled that prediction-markets platform Kalshi cannot allow residents of the state to place sports-related bets through its online platform, dealing a major blow to the company’s fast-growing sports business. The final verdict is expected on 22 January 2026.
The decision follows a legal challenge brought by Massachusetts Attorney General Andrea Joy Campbell, who accused the New York-based firm of operating unlicenced sports wagering in violation of state gambling laws. With this, Massachusetts is the first US state to successfully secure a court-ordered injunction against Kalshi. The company is facing similar legal challenges elsewhere.
In a ruling issued on 20 January 2026, Suffolk County Superior Court Judge Christopher Barry-Smith said he would grant a preliminary injunction preventing Kalshi from offering sports event contracts to users in Massachusetts unless it secures the appropriate licence from state regulators.
No operations without licence
“There is no real question that licensure, and the consequent oversight, of sports wagering operations in the state serves both public health and safety, and the Commonwealth’s financial interest,” the judge wrote.
The injunction is expected to be finalised after a court hearing scheduled for 22 January 2026. At that hearing, Judge Barry-Smith will also consider whether to pause the order to give Kalshi time to appeal the decision. Kalshi operates a prediction markets platform that allows users to trade on the outcomes of real-world events. These range from political elections and economic data releases to entertainment awards and sporting fixtures.
Kalshi challenges legal woes
The company began offering sports event contracts nationwide in January 2025. According to the judge’s ruling, those products have since become the majority of Kalshi’s overall trading volume. Unlike traditional bookmakers, Kalshi describes its products as financial contracts, allowing users to buy and sell positions based on the likelihood of an event occurring.
Massachusetts regulators, however, argue that Kalshi’s sports contracts are effectively sports betting and should therefore fall under existing gambling laws. In a lawsuit filed in September 2025, Attorney General Campbell said Kalshi had failed to obtain a licence from the Massachusetts Gaming Commission, which oversees legal sports wagering in the state.
Her office also raised concerns about consumer protection. While licenced operators in Massachusetts are prohibited from offering sports betting to anyone under the age of 21, Kalshi allows users aged 18 and over to trade on sports outcomes. The state argued that this exposed younger users, including high-school students, to potentially addictive gambling-style products without appropriate safeguards or regulatory oversight.
In a statement following the ruling, Campbell called the decision “a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling”.
Federal versus state regulation
Kalshi has consistently defended its business model, arguing that its sports contracts fall under federal jurisdiction rather than state gambling laws. The company says it is regulated by the US Commodity Futures Trading Commission (CFTC), as its products are exchange-traded derivatives, sometimes referred to as “event contracts”. Kalshi is registered with the CFTC as a contract market.
However, Judge Barry-Smith rejected this argument, saying the company had taken an “overly broad” interpretation of federal law. He wrote that Congress had never intended to strip states of their long-standing authority to regulate gambling within their borders. Instead, the judge said federal oversight by the CFTC could exist “in harmony” with state-level gambling regulation
As of now, Kalshi declined to comment on the ruling but has previously indicated it plans to appeal. But for now, such an order means the platform cannot offer new sports-related prediction markets to Massachusetts residents while the case continues.
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