Sports wagering licensees in Massachusetts are facing renewed scrutiny as the Massachusetts Gaming Commission (MGC) formally warned operators against partnering with prediction market platforms or offering sports event contracts within the state. In a letter issued this week, the regulator reminded sportsbooks that wagering in Massachusetts is bound by the rules and definitions outlined under M.G.L. c. 23N.
The MGC emphasized that a “sports event” or “sporting event” is strictly defined under state law as “a professional sport or athletic event, collegiate sport or athletic event, a collegiate tournament, motor race event, electronic sports event or other event authorized by the [C]ommission under [Chapter 23N]…” As such, the Commission reiterated that betting on these events may only occur through authorized platforms licensed in the state.
The letter cautioned operators that they are prohibited from offering sports-focused event contracts directly or through any affiliate or partner. It further stated that licensees are similarly barred from directing customers toward platforms offering such contracts in Massachusetts.
Potential Penalties for Noncompliance
The regulator made clear that violating these terms could trigger serious consequences. According to the letter, “In the event you offer sports-related event contracts in Massachusetts or direct patrons to such event contracts being offered in Massachusetts, the Commission may take steps up to and including revocation of your license.” The notice also warned that regulatory actions taken in other states related to prediction market involvement may influence future assessments of an operator’s suitability in Massachusetts.
MGC’s Warning Follows Broader National Regulatory Push
Massachusetts is the latest state to address the rising popularity of sports event contract trading. Earlier in the year, Attorney General Andrea Campbell filed a lawsuit against Kalshi, seeking to prevent the company from offering sports-related markets in the state. The new letter notes that “several Massachusetts sports wagering licensees are considering or have begun the process of partnering with entities in the prediction market space.”
Nationwide, regulators have increasingly scrutinized such platforms. At least eight states have issued cease-and-desist letters to Kalshi, disputing the idea that prediction markets fall under the jurisdiction of the Commodity Futures Trading Commission rather than state gambling laws. Kalshi, however, maintains that its operations comply with federal regulations and has responded by filing lawsuits against several states, including New York, Maryland, Nevada, New Jersey, and Ohio. A coalition of 34 state attorneys general has even filed a brief supporting New Jersey’s stance.
The tension extends beyond state governments: multiple tribal nations have also initiated lawsuits, claiming prediction markets violate the Indian Gaming Regulatory Act when functioning on tribal lands.
Sportsbooks Eye Prediction Markets Despite Regulatory Uncertainty
DraftKings and FanDuel plan to launch prediction-style products, targeting states where sports betting is illegal. FanDuel recently surrendered its Nevada sportsbook approvals, while DraftKings withdrew its applications.
The MGC emphasized that Massachusetts will not allow operators to blur the lines between licensed sports wagering and event trading. The letter concludes that “This notice shall not be construed as the Commission waiving any rights with respect to future determinations related to prediction markets and event contracts,” leaving the door open for potential future regulation.
Source:
“Massachusetts prohibits sportsbooks from offering sports prediction markets”, massgaming.com, November, 13, 2025
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