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A Massachusetts Superior Court judge rejected Kalshi’s request for an emergency stay, allowing a preliminary injunction to move forward. The injunction restricts the company from offering sports-related contracts in the state. Judge Christopher Barry-Smith ruled that Massachusetts’s interest in enforcing gambling laws outweighed any financial impact on Kalshi. The order has a 30-day enforcement term and was formally entered on Friday. Although Kalshi has the option to appeal to the Massachusetts Appeals Court, if the court does not provide remedies within the compliance window, the restrictions will go into effect.
Scope of the Injunction
The injunction bars Kalshi from offering, listing, matching, executing, clearing, or settling contracts defined as wagers on sports events. Contracts covering individual athlete statistics or portions of games also fall under the restriction. Massachusetts users cannot increase or expand positions in existing sports contracts. To comply, Kalshi must implement geofencing based on user location, not residential address. Non-sports contracts remain unaffected, and Massachusetts users may continue to fund accounts and trade those products.
Kalshi’s operational requirements
Kalshi must notify users attempting to purchase sports contracts about the injunction. The company must keep records on Massachusetts users, including communications, logs, location data, and promotional materials. Users who entered sports contracts before the location technology goes live can continue to hold or settle them under the original terms. Kalshi has 30 days to put operative controls in place and minimize any potential impact to ongoing contracts throughout the adherence period.
Appeal and Legal Context
Kalshi stated it will continue pursuing appellate options, asserting that its platform is governed by federal law and licensed by the CFTC. However, Judge Barry-Smith found that federal commodities law does not preempt state gambling regulations. Additionally, he concluded that Kalshi did not demonstrate that the injunction would be successful or cause irreversible injury. If the company wins in the end, he said, financial losses might be recouped.
Massachusetts Attorney General Weighs In
Attorney General Andrea Joy Campbell filed the lawsuit in September, arguing Kalshi offered sports wagering without a state license. She said the ruling affirms Massachusetts’ ability to enforce gambling laws and hold operators accountable.
Broader Implications
The decision adds to ongoing disputes between state regulators and prediction-market operators nationwide. Courts and regulators continue to debate whether sports event contracts fall under unlicensed wagering rules. Kalshi’s case may set an example for other operators attempting to offer sports-based contracts across state lines. Spectators expect future legal battles as companies test the boundaries of federal and state regulatory authority.
What Comes Next
Kalshi now has the option to request a stay from the Appeals Court, which could act within the 30-day implementation window. If the court denies relief, Massachusetts users will face restrictions on sports-related contracts in early March. The ruling signals that states may increasingly challenge operators that try to combine prediction markets with sports wagering.
Source: Massachusetts Superior Court
