Massachusetts Seeks Injunction to Block Kalshi's Sports Prediction Market
Massachusetts is moving to halt Kalshi's sports-related prediction markets. This marks the first time a state has sought a court order to stop the company from offering event-based sports contracts.
Attorney General Andrea Joy Campbell asked a Suffolk County Superior Court judge on Tuesday to bar Kalshi from allowing residents to trade contracts tied to outcomes of football, basketball, and other sporting events. The request follows cease-and-desist letters sent by regulators in at least nine states accusing the New York company of operating an unlicensed sports wagering business.
The Massachusetts sports betting market escalated to an enforcement action in September, arguing in its lawsuit that Kalshi was offering sports wagering without a license from the Massachusetts Gaming Commission. The state said licensed operators cannot accept bets from anyone under 21. At the same time, Kalshi's platform allows users as young as 18, making the products accessible in settings such as high-school cafeterias.
Kalshi contends its marketplace is governed exclusively by the US Commodity Futures Trading Commission and that its event contracts are regulated as swaps under the Commodity Exchange Act. That argument suffered setbacks after federal judges in Nevada and Maryland ruled that state gaming laws apply to Kalshi's sports contracts, while a judge in New Jersey temporarily blocked enforcement there.
Appeals are underway, and Kalshi continues to challenge cease-and-desist orders in New York and Connecticut. Meanwhile, the Suffolk County Superior Court judge stated that he plans to rule on the decision in January.
Commission fines Fanatics
The state's broader enforcement posture has extended beyond prediction market apps. As regulators continue to monitor sports wagering activity, the Massachusetts Gaming Commission has issued another fine tied to improper bets, underscoring the heightened scrutiny on compliance.
Fanatics was fined $20,000 after investigators determined the sportsbook accepted wagers on a non-tournament Boston College football game, which is prohibited under state law. Betting on in-state college teams is only permitted when they participate in tournaments with four or more teams.
According to enforcement counsel Diandra Franks, 83 wagers totaling $3,325 were placed between Sept. 15 and 20 of last year on Boston College's matchup against Michigan State, which the team won 23-19.
Fanatics voided losing bets and returned stakes, while honoring winning wagers. Parlays with cancelled selections were paid out with one fewer leg. The company has now been fined three times in Massachusetts, totaling $45,000 in penalties for similar violations since the market launched in 2023.
Commissioners also cited varying opinions regarding the adequacy of the new fine. Eileen O'Brien dissented because a fine of only $5,000 per incident would make little difference to the company, while Nakisha Skinner questioned the number of repeated mistakes committed by a Fanatics employee and wondered if a higher safety factor was needed to prevent such offenses in the future.
