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Massachusetts is about to become the first U.S. state to force Kalshi off sports, at least inside its borders.
A Suffolk Superior Court judge ruled Tuesday that Massachusetts can bar Kalshi from offering sports-related event contracts to residents without playing by the state’s sports betting rules.
The decision, issued by Judge Christopher Barry-Smith, cleared the way for the Attorney General’s office to seek an order that would stop Kalshi from taking new sports trades from Massachusetts users. A ban could begin as soon as Friday, depending on how quickly the court signs off on the final language.
The judge wasn’t buying Kalshi’s “federal law only” defense
Kalshi’s main argument has been that it’s regulated under federal commodities law through the CFTC, so a state shouldn’t be able to treat its sports contracts like sports wagering.
Judge Christopher Barry-Smith called that line of reasoning “not compelling,” and wrote that if Congress wanted to strip states of authority here, it would have said so clearly.
He also brushed aside Kalshi’s claim that a Massachusetts block could be financially ruinous, noting that the company expanded into states with licensing requirements “even after the CFTC warned it to be cautious” given ongoing state enforcement.
Massachusetts AG: “No exceptions”
Attorney General Andrea Campbell framed the ruling as a line in the sand for any operator trying to offer sports wagering without state approval.
“The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules, no exceptions,” Campbell said in a statement.
She added that the ruling is a “major step” toward strengthening state gambling laws and reducing harms tied to unregulated gambling.
Massachusetts says this is sports betting, not “trading”
Kalshi started as a prediction market for event-based contracts, the kind of products usually associated with economic indicators or major news outcomes. Over time, sports became the headline driver, and court filings cited by reporters show that by May 2025, sports represented about 70% of Kalshi’s revenue.
Massachusetts argues Kalshi’s sports contracts function like wagers on game outcomes, and the state requires licensure for that activity. Mobile sports betting revenue in Massachusetts is also taxed at 20%, which creates an obvious incentive for the state to keep sports wagering inside its regulated system.
Wednesday, and the next deadline
The judge gave Massachusetts until Wednesday to submit a proposed injunction that doesn’t unwind existing contracts already in place. Kalshi has until Friday to challenge the proposed terms.
While this isn’t a clear “ban or no ban.” Critics and operators will still follow the details, especially how the state draws the line between stopping new sports contracts and handling positions already open.
The bigger picture: one state win could change the playbook
Kalshi is fighting multiple state battles, and the industry is watching Massachusetts because it’s a clean test of the core question: Are sports event contracts a trading product, or sports betting in a new wrapper?
If Massachusetts’ injunction stands and takes effect, more states will feel emboldened to move beyond cease-and-desist letters and go straight for court orders.
Source: DL News
