September 13, 2025

Massachusetts Attorney General Files Lawsuit Against Kalshi

News Summary

Massachusetts Attorney General Andrea Joy Campbell has initiated legal action against Kalshi, a prediction market platform, for allegedly operating sports gambling services without a license. The lawsuit, filed on September 12, 2025, claims Kalshi misclassifies sports betting as ‘events contracts’ to bypass state regulations. With about 70-75% of Kalshi’s trading volume linked to sports betting, the Attorney General seeks to halt its offerings and address concerns about consumer protections and regulatory compliance.

Boston, Massachusetts — The Massachusetts Attorney General Andrea Joy Campbell has launched a lawsuit against Kalshi, a prediction market platform, alleging that the company is unlawfully offering sports gambling services without the necessary state license. The lawsuit, filed in Suffolk County Superior Court on September 12, 2025, contends that Kalshi is operating under the guise of “events contracts,” a classification that the state argues does not exempt the company from local regulations governing sports betting.

The Attorney General has asserted that for Kalshi to legally conduct business in the sports gaming sector within Massachusetts, it must first acquire a license and adhere to state laws. Additionally, the lawsuit seeks a court order to halt any offerings of sports events contracts in the state while the case is underway.

According to the lawsuit, Kalshi has been significantly involved in sports betting, with sports event wagers making up approximately 70% of its trading volume between February 25, 2025, and May 17, 2025. This percentage rose to 75% following the launch of single-game markets on March Madness. Analysts indicate that during this same period, Kalshi’s revenue from sports-related wagers surpassed that of established, licensed sportsbooks such as DraftKings and FanDuel, leading to concerns about the regulatory compliance of such services.

A spokesperson for Kalshi reported that $439 million worth of wagers had been placed on NFL contracts as of now. Despite the ongoing legal challenges, Kalshi has characterized itself as a leader in the realm of sports prediction trades, indicating its intention to defend itself against these allegations fiercely.

The lawsuit highlights that more than three-quarters of Kalshi’s trading volume as of May 2025 stemmed from sports, which the Attorney General says is a greater share than that of any licensed sportsbooks. Massachusetts regulators have previously raised alarms that offering prediction market services with event contracts could potentially jeopardize the licenses of operators involved.

Kalshi faces mounting scrutiny not just from Massachusetts but also from other states where it has received cease-and-desist orders, including Arizona, Montana, Ohio, and Illinois. These actions reflect a growing concern over the legitimacy and regulatory status of prediction markets, particularly those resembling sports betting.

The Attorney General has expressed apprehension regarding potential public health risks linked to unregulated sports gambling practices. She noted that the concerns are compounded by the absence of crucial consumer protections that licensed operators provide, which are necessary for safeguarding the interests of bettors. The Massachusetts Gaming Commission (MGC) confirmed that no formal application for a sports wagering license from Kalshi has been submitted to date.

Moreover, the platform’s business model is reportedly under scrutiny for its use of behavioral design elements derived from gambling psychology, coupled with its recent introduction of a parlay product, which may further blur the line between prediction markets and actual gambling. The lawsuit filed by the Attorney General suggests that these practices may be misleading stakeholders and endangering the integrity of the legal sports gaming framework.

In a bid to strengthen the regulations surrounding online sports games, Massachusetts Representative David Muradian has proposed HB 4431, a bill aimed at prohibiting any online game or contest that simulates casino gaming without proper licensing and oversight. This legislative measure is expected to bolster the enforcement of existing gaming laws and offer clearer pathways for licensing within the state.

As the legal proceedings unfold, Kalshi remains firm in its stance as a self-proclaimed pioneer in the prediction market arena, promising to contest the allegations. The outcome of this lawsuit will have significant implications not just for Kalshi but for the broader landscape of sports gambling and prediction markets in the United States.

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Author: STAFF HERE BOSTON WRITER

BOSTON STAFF WRITER The BOSTON STAFF WRITER represents the experienced team at HEREBoston.com, your go-to source for actionable local news and information in Boston, Suffolk County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Boston Marathon, Head of the Charles Regatta, and Boston Harborfest. Our coverage extends to key organizations like the Greater Boston Chamber of Commerce and Associated Industries of Massachusetts, plus leading businesses in finance, biotech, and insurance that power the local economy such as Fidelity Investments, Biogen, and Liberty Mutual Insurance. As part of the broader HERE network, we provide comprehensive, credible insights into Massachusetts's dynamic landscape.

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