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A court ruling in Massachusetts just shifted the legal balance between state gambling regulators and prediction market platforms. The decision directly affects how sports event contracts can operate inside state borders and adds fresh weight to an ongoing regulatory fight playing out across the United States.
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Massachusetts secured a major legal victory against prediction market platform Kalshi after a state judge ruled that the company cannot offer sports-related event contracts without proper authorization.
Judge Christopher Barry-Smith sided with the Commonwealth on Tuesday, granting a request for a preliminary injunction and rejecting Kalshi motion to dismiss. The ruling gives Massachusetts the power to halt new sports contracts offered by the platform inside state lines.
“The Commonwealth is entitled to a preliminary injunction prohibiting Kalshi from offering sport-related event contracts in the absence of the required license under the Sports Wagering Law,” Judge Christopher Barry-Smith wrote.
The court ordered Massachusetts to submit a proposed injunction by Wednesday at 4 p.m. ET. Judge Barry-Smith noted unresolved issues between the two sides, including how to block new contracts without disrupting contracts already in circulation. A hearing scheduled for Friday could formalize the order, marking the first time a state receives a court-backed injunction targeting a prediction market platform.
At the core of the ruling sits one key point. Judge Barry-Smith agreed that Kalshi must hold a state license to offer sports-related contracts and said enforcing that requirement serves the public interest.
The judge dismissed arguments claiming that barring Kalshi from Massachusetts would harm the company business. He also rejected claims that state regulators lacked jurisdiction, pointing to the legal framework created after the repeal of PASPA, which allowed states to regulate sports wagering within their borders.
Kalshi has long argued that oversight by the Commodity Futures Trading Commission gives it national reach across all 50 states. That reasoning failed to convince the Massachusetts court.
In denying the platform motion, Judge Barry-Smith wrote that Kalshi argument relied on federal preemption “which fails.”
Massachusetts framed Kalshi sports event contracts as traditional sports betting products. Court filings described offerings that resemble sportsbook markets, including spreads, totals, and parlays.
The Attorney General of Massachusetts filed the lawsuit in September 2025, asserting that Kalshi operates inside the wagering space rather than a separate financial market. A judge later ruled that the dispute belonged in state court instead of federal court, clearing the path for the injunction request.
State lawyers argued that allowing such contracts without licensing undermines consumer protections built into state sports wagering rules.
Kalshi legal battles extend well beyond Massachusetts. The platform continues to face resistance from regulators in Nevada, Ohio, and New Jersey, where similar concerns have surfaced around sports contracts and regulatory authority.
The Massachusetts ruling already entered filings elsewhere. The New York Gaming Commission cited the decision as supplemental authority in its own dispute involving Kalshi.
Massachusetts now stands positioned as a test case for how far states can go in limiting prediction markets tied to sports outcomes.
Kalshi has until Friday at 10 a.m. ET to respond to the proposed injunction. If the hearing proceeds at noon, the platform may attempt to seek a stay while the broader case continues.