Kalshi Banned from Mass. Sports Betting in 30 Days

Kalshi Faces 30-Day Ban on Sports Contracts in Massachusetts

A Suffolk County Superior Court judge has denied prediction-market operator Kalshi's request to delay an injunction, effectively banning it from offering sports-events contracts in Massachusetts within 30 days without a state gaming license. The judge ruled that the state's interest in regulating sports gaming outweighs the financial impact on Kalshi.

Regulatory Clash Over Prediction Markets

This ruling is a key development in the ongoing nationwide conflict between state gaming regulators and prediction-market operators. Kalshi, which is licensed by the U.S. Commodity Futures Trading Commission (CFTC), argues that its contracts fall under exclusive federal jurisdiction. However, Massachusetts Attorney General Andrea Joy Campbell contended that Kalshi was operating an unlicensed sports wagering enterprise, a view the court upheld.

Precedent for the Prediction Market Industry

The decision sets a significant precedent, reinforcing the authority of state-level gaming laws. Judge Christopher Barry-Smith noted that Kalshi adopted its business model with eyes wide open to the legal risks. The company has stated its intention to appeal the decision, signaling a prolonged legal fight over regulatory authority.

Outlook and Next Steps

Kalshi will proceed with its appeal, continuing the legal battle over whether federal or state law governs its operations. The outcome will be closely watched by other prediction markets and regulators in states like Nevada, where similar challenges are underway.

FAQ

Q: Why was Kalshi banned in Massachusetts?
A: A judge ruled it was operating as an unlicensed sports wagering enterprise, in violation of state gaming laws.

Q: What is Kalshi's main legal argument?
A: Kalshi claims its operations are governed by federal law under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), not state gaming laws.

Source: Reuters via Investing.com