The prediction market Kalshi violates Massachusetts’ state gaming legislation, claiming its legal lawyer in a trial Friday.
Attorney General Andrea Joy Campbell claimed in an archiving that sporting event contracts introduced by Kalshi in January 2025, violating the state’s sports business legislation, which requires operators to be licensed. Campbell asks for a court to block Kalshi from offering sports prediction markets in the state without a license as well as seeking monetary and other relief.
Prediction markets have grown in popularity over the past few years, with cryptophocused companies such as polyming and companies like Kalshi that see tremendous interest in questions such as who would win the last presidential election. While Massachusets admission notes that Kalshi offers these different categories of prediction markets, its lonely fee is focused on the company’s sports-related efforts.
The archiving said that Kalshi’s prediction markets that are structured as binary options operate in the same way that licensed sporting efforts do compare it to fanduel as an example.
“Kalshi is about accepting efforts, defined as ‘a sum of money or things of value, risking at an uncertain event’ at amateur and professional sporting events in the form of selling sporting event contracts,” the archiving, adding, “Kalshi’s sporting event contracts constitute sports education” as defined in Massachusetts laws and usable rules.
Kalshi had been through a long -term legal tussle at the federal level as it struggled with the Commodity Futures Trading Commission on the legality of its business model, but the regulator eventually supported down earlier this year. Now one of Kalshi’s board members, former CFTC commissioner Brian Quintenz, is President Donald Trump’s nominees to run the agency.
Part of the Massachusetts case is pointing to Kalshi actions, which the lawyer’s office claims are designed to link possible bettors.
“Kalshi’s platform uses behavioral design mechanisms drawn from game psychology, including features that encourage impulsive commitment, utilization price expectation and reduce users’ perception of financial risk,” archiving.
It pointed to Kalshi’s website design, including presentation of possible payouts in “Bright Green Font, a color that signalizes security and correctness”, while odds were presented in black font. “This interface design is subtly encourages high-risk transactions by emphasizing reward while hiding risk.”
Campbell said “If Klashi wants to be in the sports game business in Massachusetts, they should get a license” in a statement. “Sports Satives come with a significant risk of addiction and financial loss and must be strictly regulated to mitigate the consequences of public health.”
In a statement, a spokesman for Kalshi said, “Kalshi offers his users a fair, transparent, federally regulated and nationwide marketplace. Instead, proud to be the company that has been grounding for this technology and standing ready to defend it again in a court.”
