Massachusetts has once again succeeded against prediction markets operator Kalshi, after a Suffolk Superior Court judge refused the platform’s bid to block an order restricting access to Bay State users.
Judge Christopher Barry-Smith rejected Kalshi’s request for an emergency stay, resulting in the company having to block Massachusetts customers from trading sports event contracts once the 30‑day enforcement period ends on March 9.
Legal battles in Massachusetts
In September 2026, Attorney General Andrea Campbell sued Kalshi. She argued that the platform was operating as an unlicensed sportsbook. Last month, Barry-Smith sided with the state, granting an order that forces Kalshi to geofence Massachusetts residents out of its sports markets. Non‑sports contracts, however, remain unaffected.
As reported by several media outlets, Barry-Smith noted that while Kalshi is federally regulated by the Commodity Futures Trading Commission (CFTC), state gambling laws fall under “traditional police powers.” He added that the potential harm to Kalshi’s business does not outweigh Massachusetts’ responsibility to oversee its regulated sports betting industry. Kalshi may still seek relief from an appellate court.
How prediction markets differ
Traditional gambling pits players against the “house,” which extracts fees and maintains an edge. Kalshi argues its model is different. Staff members create “markets,” often based on user suggestions, such as whether a public figure will make a specific statement. Traders then wager “yes” or “no” on the outcome, with money required on both sides. Institutional partners or large‑portfolio users often provide liquidity, incentivised by perks and data access.
Kalshi insists no “house” is involved since traders compete against one another. Yet federal lawsuits challenge this claim, alleging that Wall Street firms backing Kalshi function much like a traditional bookmaker, as mentioned in several media outlets.
Polymarket joins the fight
Meanwhile, rival platform Polymarket recently filed suit against Campbell and the Massachusetts Gaming Commission in federal court. It also sought to block the enforcement of state gambling laws. Polymarket’s Chief Legal Officer Neal Kumar argued that federal law gives the CFTC authority over event contracts, despite state challenges, as reported by several media outlets.
The latest case falls under investigations from U.S. regulators and courts as they have intensified their scrutiny of platforms that allow users to trade on real-world events, namely sports.
Today, we filed a lawsuit in federal court against Massachusetts. Congress gave the CFTC, not states, exclusive authority over event contracts.
— Neal Kumar (@HereComesKumar) February 9, 2026
These are national markets with critical questions that must be resolved in federal court 🧵
A nationwide legal showdown
Kalshi is currently entangled in 20 lawsuits across multiple states. In Nevada, a judge initially granted Kalshi an injunction but reversed course in November 2025. It treated sports event contracts as illegal betting instead. In Maryland, a judge denied Kalshi’s request for an injunction after regulators issued cease‑and‑desist orders.
Contrastingly, New Jersey allowed Kalshi to secure a preliminary injunction last May. But the case is now before the Third Circuit Court of Appeals. Another win for Kalshi is in California. A judge sided with Kalshi. It ruled that CFTC oversight means trades do not qualify as bets under the Indian Gaming Regulatory Act. Other cases involve regulators and tribal entities in New York, Ohio, and several class‑action suits.
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