Massachusetts Can Ban Kalshi Sports Markets for Now, Judge Rules

A U.S. District Court judge has denied prediction market platform Kalshi’s request for a preliminary injunction, effectively upholding the Massachusetts Securities Division’s (MSD) ruling that the company’s proposed sports outcome contracts constitute illegal gambling under state law. The decision grants Massachusetts the authority to maintain its ban on Kalshi’s sports-related event contracts while the broader legal challenge continues.

Kalshi sought to offer contracts allowing users to wager on specific outcomes in professional sports, such as whether a certain team would win a game or score above a set threshold. The MSD previously rejected Kalshi’s application, asserting that these financial instruments meet the definition of unlawful betting activities in the Commonwealth.

The judge sided with the MSD, finding that the state demonstrated a likelihood that the contracts involve an element of chance and provide a return dependent on the uncertain outcome of a future sports event, aligning them closely with prohibited sports wagering activities. The court emphasized that Kalshi failed to demonstrate that it would suffer irreparable harm or that it was likely to succeed in proving its products are regulated financial derivatives rather than illegal gambling under state statutes.

Kalshi, which is registered with the Commodity Futures Trading Commission (CFTC) for other types of event contracts (e.g., economic and political outcomes), maintains that its offerings are sophisticated financial tools. However, the ruling ensures that the state’s prohibition on sports-related prediction markets remains in effect pending the resolution of the full lawsuit.

Source: Massachusetts Can Ban Kalshi Sports Markets for Now, Judge Rules