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Massachusetts AG files amended lawsuit against Kalshi over sports betting after court ruling
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Massachusetts Attorney General Andrea Joy Campbell has filed an amended lawsuit against prediction markets platform Kalshi, alleging the company illegally offered sports betting to users under 21. The amended complaint, approved by Associate Justice Peter Krupp in Suffolk County Superior Court on Tuesday, builds on a September 2025 filing that accused Kalshi of violating state gambling laws. The court allowed the 71-page document to proceed, intensifying a legal battle that could set precedents for state versus federal regulation of prediction markets.
The original lawsuit claimed Kalshi needed a license from the Massachusetts Gaming Commission to offer sports event contracts. In January 2026, a judge granted a preliminary injunction barring Kalshi from such offerings while the case is under review. The amended complaint adds that Kalshi âtargets those under 21 years of age and does little to stop them from using its platform,â citing marketing on university campuses and ads featuring individuals who âappear to be younger than 21 years old.â Massachusetts authorities allege that Kalshi allows anyone 18 or older to create an account and wager on sports.
Kalshi, which enables users to trade event contracts on sports, politics, and current events, faces similar actions in other states. However, the company has support from the U.S. Commodity Futures Trading Commission (CFTC), which filed a brief in April arguing that the CFTC holds âexclusive jurisdictionâ over prediction markets. CFTC Chair Michael Selig stated that event contracts amount to âswapsâ under the Commodity Exchange Act and are not subject to state regulation, warning, âTo any state that seeks to nullify federal law and seize authority over these markets, I say again: we will see you in court.â
The case highlights a growing tension between state regulators and federal authorities over oversight of prediction markets. If the legal conflict escalates, it could reach the U.S. Supreme Court, which would need to clarify the boundaries of state and federal jurisdiction. The outcome may affect not only Kalshi but also platforms like Polymarket, which offer similar contracts.
Kalshi did not immediately respond to requests for comment, but a spokesperson previously said the company is âready to defendâ itself in court. Meanwhile, gaming organizations and tribal groups have urged senators to add language to the Digital Asset Market Clarity (CLARITY) Act that explicitly prohibits event contracts tied to sports and casino-style gaming. The bill, currently before the Senate, would grant the CFTC greater regulatory authority over digital assets.
The path forward remains uncertain. While the CFTC asserts its authority, Massachusetts and other states argue that consumer protection laws allow them to regulate gambling within their borders. The CLARITY Act could provide a legislative solution, but until Congress acts, courts will continue to shape the legal landscape for prediction markets.
