The legal tide may be turning against prediction market firms. A Massachusetts judge ruled on Tuesday that Kalshi must immediately cease offering its sports prediction market in the state.
The ruling grants a request by state Attorney General Andrea Joy Campbell for a preliminary injunction against the company. Kalshi has argued that its offerings are different from traditional sports betting and solely regulated by the Commodity Futures Trading Commission.
Suffolk County Superior Court Judge Christopher Barry-Smith disagreed with that assertion. Massachusetts has taken a different approach than some other states by attempting to bar sports prediction markets via state court.
Campbell said the ruling is “a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling.”
Latest Setback For Prediction Markets
The injunction requires Kalshi to comply with Massachusetts sports betting laws. Barry-Smith ruled that Kalshi took an “overly broad” outlook on federal law governing prediction markets.
The judge asserted that Congress didn’t intend to supersede state laws governing sports betting. Barry-Smith further said that it was in the state’s interest to regulate sports offerings.
“There is no real question that licensure, and the consequent oversight, of sports wagering operations in the state serves both public health and safety, and the commonwealth’s financial interest,” Barry-Smith wrote in the ruling.
An additional hearing is set for Friday where the judge may delay the order as an expected appeal plays out.
Prediction Market Companies Under Fire
The Bay State is just the latest battleground facing prediction market platforms like Kalshi and Polymarket. Last week, Tennessee regulators ordered the platforms to stop offering sports contracts in the Volunteer State.
Gaming lawyer Daniel Wallach posted on X Wednesday that the Massachusetts ruling is part of a string of recent losses in court for prediction markets. That includes cases in Maryland and Nevada.
That’s 6 straight losses for PMs vs. State governments:
– MD (Kalshi)
– NV (Crypto)
– NV (Kalshi)
– NV (Robinhood)
– MA (remand order)
– MA (PI grant to MA)Tide turned on Aug. 1st.
— Daniel Wallach (@WALLACHLEGAL) January 20, 2026
The companies are also facing opposition at the federal level. In September, federal legislators circulated a draft letter outlining some of their concerns about sports prediction markets to the CFTC.
Those included compliance with betting age requirements and other issues that legal sportsbooks must adhere to. The letter questioned whether the offerings are simply an end-run around state sports betting laws.
