Massachusetts scored another win over Kalshi after Judge Christopher Barry-Smith denied the platform’s bid to block an order cutting access to Bay State users next month.
Massachusetts notched another victory against prediction markets operator Kalshi for state regulators last week.
Suffolk County Superior Court Judge Christopher Barry-Smith on Friday denied Kalshi’s request for an emergency stay of an order requiring the company to block customers in Massachusetts. Their access to sports event contracts on the site will be denied after a 30-day implementation period ending 9 March.
Barry-Smith granted Massachusetts its request for an injunction against Kalshi last month. Attorney General Andrea Campbell sued Kalshi in September for operating as an unlicensed sportsbook.
Fresh off the ruling, Polymarket filed suit Monday against Campbell and the Massachusetts Gaming Commission in the US District Court for the District of Massachusetts to prevent “imminent and irreparable harm” from Massachusetts enforcing its gambling laws against the prediction markets operator.
What MA judge said about Kalshi
Kalshi continues to fight multiple lawsuits across the country, arguing it is federally regulated by the Commodity Futures Trading Commission. Barry-Smith said some of Kalshi’s markets preempt state laws, as long as they are considered commodities trading. That does not include “traditional state police powers, such as gambling regulation”, he wrote.
Barry-Smith said the harm to Kalshi’s business from his initial ruling does not outweigh Massachusetts’ role overseeing the regulated sports betting industry.
“Kalshi adopted its business model – relying on CFTC regulation of ‘swaps’ to offer nationwide sports betting in contravention of state gaming laws – with eyes wide open,” Barry-Smith wrote. “It plainly must have appreciated the risk – or likelihood – of an order like this preliminary injunction. Being a sophisticated entity, it presumably prepared for that risk.”
Barry-Smith noted Kalshi can seek a stay from an appellate court judge.
If not granted a stay, Kalshi will be required to use geofencing technology to block Massachusetts residents from its sports event contracts. The ruling will not affect non-sports markets.
Polymarket piles on in Massachusetts
Polymarket Chief Legal Officer Neal Kumar announced the lawsuit against Massachusetts on social media. Kumar said federal law provides for the CFTC’s authority over event contracts despite state challenges.
Polymarket is seeking injunctive relief against the state.
The lawsuit referenced Barry-Smith’s ruling Friday as a reason to file the lawsuit.
“That injunction demonstrates the Commonwealth’s willingness to use state law to shut down federally authorised markets despite clear federal preemption,” the lawsuit reads. “Polymarket US now faces a real and imminent risk of identical enforcement, exposing it to civil penalties, potential criminal liability, forced cessation of operations within Massachusetts, and severe collateral consequences to its nationwide operations. The resulting harm would be irreparable.”
It is not Polymarket’s first legal battle against a state. A Carson City District Court judge in Nevada recently ruled that the operator represented potential “immediate, irreparable” harm to the state’s gambling industry. The judge issued a two-week temporary restraining order. A hearing for a preliminary injunction is set for Wednesday.
Prediction markets lawsuit rulings
Judges in multiple states already weighed in on prediction markets lawsuits, many of which are centred on Kalshi.
In Nevada, a judge initially granted Kalshi an injunction preventing the state’s regulators from enforcing Nevada’s gaming laws against it. That judge reversed his decision in November 2025, allowing the Nevada regulators to treat sports event contracts as illegal sports betting.
“Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act in an attempt to evade state regulation,” US District Judge Andrew Gordon’s reversal order reads. “Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the CEA and cannot be sustained.”
A judge in Maryland also denied Kalshi’s request for an injunction against the Maryland Lottery and Gaming Control Commission. The commission sent cease-and-desist orders last April, resulting in Kalshi’s lawsuit.
By contrast, a New Jersey judge granted Kalshi a preliminary injunction against that state regulator last May. That case continues in the US Court of Appeals for the Third Circuit. A group of 34 attorneys general, including Campbell, sent a brief in support of New Jersey.
Kalshi also picked up a significant win in California, where a judge denied a motion from tribal parties seeking to stop Kalshi from operating on tribal land. The judge said the CFTC regulations mean the trades do not qualify as bets and therefore do not violate the Indian Gaming Regulatory Act.
Kalshi is in the midst of approximately 20 lawsuits, including against multiple tribes and regulators in New York and Ohio. Among the lawsuits are also four cases looking for class-action status against the platform.
Multiple sources across the gambling industry expect the issue to reach the Supreme Court.
New CFTC chair bites back
New CFTC Chair Michael Selig last month said the Trump administration could begin to challenge the states taking on Kalshi and other prediction markets.
“I have directed CFTC staff to reassess the Commission’s participation in matters currently pending before the federal district and circuit courts,” Selig said. “Where jurisdictional questions are at issue, the Commission has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives.”
Selig said the CFTC will also work on new event contracts rules. He said it will establish “clear standards for event contracts that provide certainty”.
Under the Biden administration, the CFTC worked to prohibit sports and election betting, but the commission did not finalise the rules before the transition. Selig withdrew the proposed rules last week.
“The Commission is withdrawing that proposal and will advance a new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act that promotes responsible innovation in our derivatives markets in line with Congressional intent,” Selig said.
Pat Evans
Pat covers the legislation and regulation of online gambling in North and South America, having covered the US sports betting industry extensively since 2019.
