Massachusetts Attorney General Andrea Joy Campbell has filed a lawsuit against Kalshi, a New York-based trading platform, claiming the company is illegally offering sports wagers under the guise of event contracts. The legal action, submitted to Suffolk County Superior Court, aims to halt Kalshi’s operations in the state and alleges the firm failed to comply with key regulatory requirements.
Campbell contends that Kalshi’s product, which allows users to predict outcomes on various topics—including sports, politics, and the economy—is essentially an unlicensed sportsbook. “Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” she said in a statement.
Kalshi responded, stating it offers “a fair, transparent, federally-regulated, and nationwide marketplace” and accused Massachusetts of resisting progress. “Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas,” the company said.
Licensing Concerns and Alleged Consumer Risks
The lawsuit claims Kalshi bypassed state gaming laws by promoting its services across TV, social media, and platforms like Robinhood without obtaining a license from the Massachusetts Gaming Commission (MGC). Further allegations include failure to enforce the state’s legal gambling age of 21—Kalshi permits users aged 18 and up—and not warning users about the risks associated with its binary yes/no payout model.
The platform also lacks user protection tools such as spending limits or self-exclusion options, according to the AG’s office. Campbell is seeking an injunction to immediately stopKalshi from offering its sports-based event contracts in Massachusetts while the case proceeds.
MGC Aligns with AG on Enforcement Push
The MGC is backing the lawsuit and reiterated concerns about the broader trend of prediction markets crossing into sports gambling territory. Chair Jordan Maynard voiced support: “Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections.”
Maynard also criticized public remarks by Kalshi’s legal counsel Josh Sterling, who previously suggested that users should be accountable for their financial decisions, even if it leads to loss. In response, Maynard said: “I hear someone on a panel the other day say ‘if someone loses their shirt, who cares?’ We f***ing care.”
Kalshi’s Legal Issues Extend Beyond Massachusetts
This lawsuit adds to Kalshi’s growing list of legal challenges across the United States. At least seven states have already issued cease-and-desist orders against the company for allegedly operating illegal gambling services. Additionally, Kalshi is involved in ongoing litigation in California, where tribal groups are suing the company and Robinhood over unauthorized sports betting and misleading advertising—especially around the repeated use of the term “betting” in promotions.
Unlike federal suits, the Massachusetts complaint focuses heavily on Kalshi’s branding, user interface, and marketing practices, arguing they closely resemble those of traditional sportsbooks. Features like leaderboards and incentivized repeat trading are also cited as concerns, as they may encourage problematic gambling behavior.
Kalshi maintains that its platform is a legal innovation in the financial markets space and says it’s prepared to defend its model. “We are proud to be the company that has pioneered this technology and stand ready to defend it once again in a court of law,” a company spokesperson said.
Source:
“Massachusetts accuses Kalshi of running illegal sports wagering operation”, yahoo.com, Sep 12, 2025.
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