As legal battle continues, prediction market platform can still operate as usual in the Bay State.
Photo By – SIPA. In this photo illustration, a smartphone with the logo of US prediction market company Kalshi Inc. is seen on screen in front of website. (Photo by Timon Schneider / SOPA Images/Sipa USA)
The legal battle between Massachusetts and prediction market platform Kalshi will last at least until early February.
Key Takeaways
- Massachusetts judge orders a reply from the state on Jan. 30.
- The prediction market platform filed a motion to stay on Friday.
- Kalshi is still able to offer sports event contracts in the Bay State.
Kalshi filed an emergency motion to continue offering federally regulated sports-event contracts in the Bay State heading into Friday’s hearing to determine if Massachusetts’ preliminary injunction would block the trading exchange’s markets.
Judge Barry-Smith will hold another hearing to address the “contours” of the preliminary injunction and Kalshi’s emergency motion for a stay of the preliminary injunction. MA’s opposition to the motion is due next Friday and Kalshi’s reply due on 2/4. Hearing to follow.
— Daniel Wallach (@WALLACHLEGAL) January 23, 2026
Judge Christopher Barry-Smith heard arguments from both sides and decided to prolong the saga, offering guidance on the situation. The state was ordered to reply to Kalshi’s request for a stay by Jan. 30, while Kalshi must respond by Feb. 4.
After that, Judge Barry-Smith will determine the status of the Bay State’s preliminary injunction and Kalshi’s stay request.
“Hopefully, a couple of weeks from today, these issues will be ready for me to decide,” Barry-Smith said.
This hearing has begun. Judge Christopher Barry-Smith wants to 1st determine what a preliminary injunction should say…but it won’t go into effect until they also discuss Kalshi’s motion to stay while it appeals.
Forgive some legal jargon as I try to keep the internet updated. https://t.co/djcTtPmtix
— Ben Horney (@BenHorney) January 23, 2026
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Still operational
Massachusetts received a favorable ruling from Barry-Smith on Tuesday, granting the preliminary injunction that would force Kalshi to stop offering sports-event contracts or be licensed by state regulators.
One of the issues between the two sides is how to settle undecided sports contracts, which must be determined before the judge’s final order. Barry-Smith said he’s inclined to only enter an injunction that affects future markets, not the open ones.
Since the injunction was not put in place on Friday, Kalshi can still operate as usual in the Bay State, which is key with the NFL holding the NFC and AFC Championship games on Sunday. A ruling could be in place before the Feb. 8 Super Bowl.
Massachusetts reiterated its stance that those markets are “illegal” and that they “want them to stop.”
Public interest argument
Kalshi argued in Friday’s filed motion that “a stay is in the public interest,” and that the prediction market platform would “suffer irreparable harm” without a favorable ruling.
“A stay is warranted, respectfully, because Kalshi is likely to prevail on appeal as to the central contested issue of whether the Commodity Futures Trading Commission retains exclusive jurisdiction, preempting state regulation, of transactions that take place on CFTC-regulated “designated contract markets,” the trading exchange stated in the legal document.
Kalshi has been offering sports-event contracts in all 50 U.S. states since last year’s Super Bowl, but state regulators in other jurisdictions with legal sports betting have taken issue with those markets.
Nevada, New York, New Jersey, and Ohio are among the states that have issued cease-and-desist orders, and Kalshi has responded with lawsuits in several jurisdictions to keep regulators from taking legal action against them. Some of those states are using the Massachusetts ruling to help their cause.
