Kalshi, a prediction market platform, has pledged to challenge a new lawsuit filed by the state of Massachusetts, which accuses the company of running unlicensed sports betting operations.
“We are proud to be the company that pioneered this technology and are ready to defend it once again in court,” a Kalshi spokesperson told Cointelegraph on Friday.
Calling prediction markets “a critical innovation of the 21st century,” the company said it believes all Americans should have access to them.
The civil complaint, filed Friday in Suffolk County Superior Court, claims Kalshi disguises sports gambling as “event contracts,” allegedly breaching Massachusetts’ strict gambling laws.
“Kalshi is in breach of the Commonwealth’s strict sports betting laws by providing unlicensed wagering services to Massachusetts residents,” the lawsuit alleged.
The filing also claimed that as of May 2025, over 75% of Kalshi’s trading activity was tied to sports — a higher proportion, it argued, than major operators like DraftKings or FanDuel.
In response, a Kalshi spokesperson said Massachusetts regulators opted to pursue litigation instead of working toward a direct resolution.
“Rather than engage in dialogue with Kalshi as many other states have done, Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas.”
Kalshi maintains that it is federally regulated by the Commodity Futures Trading Commission (CFTC) and therefore outside the reach of state gambling laws. The platform has also received cease-and-desist notices from states including Arizona, Montana, Ohio, and Illinois.
The Massachusetts case surfaces as rival prediction market Polymarket reportedly gears up for a U.S. launch. According to Business Insider, the blockchain-based platform is in talks to raise new funding that could more than triple its June valuation of $1 billion, with at least one investor valuing the company as high as $10 billion.
The report followed a Sept. 4 post on X by Polymarket CEO Shayne Coplan, who said the company had received the “green light” from the CFTC to operate in the U.S. — adding, “Stay tuned.”
