Massachusetts Court Blocks Kalshi Sports Markets in Bay State
Massachusetts officials scored a legal victory in court Tuesday in their case against Kalshi as a judge granted an injunction barring the prediction market operator from offering futures contracts on sporting events in the Bay State.
Superior Court Justice Christopher Barry-Smith said in a 17-page ruling that the state “is likely to succeed on the merits.” The Massachusetts Attorney General’s office filed the suit in September against Kalshi, which added sports to its catalog of events a year ago.
Massachusetts is one of several states, including Maryland and Nevada, that have taken Kalshi to court. They claim the federally regulated exchange’s sports offerings contracts are tantamount to sports betting, for which it needs a license. Some courts have initially ruled in Kalshi’s favor.
“Kalshi knowingly proceeded in Massachusetts and other states that require sports wagering entities to be licensed, even after the CFTC warned it to be cautious in light of ongoing state enforcement efforts,” the judge wrote. “Thus, any hardship it faces in removing its non-compliant Massachusetts offerings is of its own making.”
Barry-Smith’s ruling only affects Kalshi from offering sports markets from Tuesday forward. The exchange will not need to cancel any contracts previously purchased by Massachusetts traders.
A preliminary injunction does not serve as a final decision in the case. Kalshi, which was also denied its request to dismiss the case in Tuesday’s ruling, may also appeal the decision.
Kalshi Injunction ‘Major Step Forward’
While the legal battle over prediction markets is far from over and will likely end up before the U.S. Supreme Court, Massachusetts officials celebrated the decision, and the New York Gaming Commission is using the decision to support its legal case against Kalshi.
“The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules – no exceptions. Today’s victory marks a major step toward fortifying Massachusetts’ gambling laws and mitigating the significant public health consequences that come with unregulated gambling.” Massachusetts Attorney General Andrea Joy Campbell said in a statement
Jordan Maynard, who chairs the Massachusetts Gaming Commission, said the agency hopes a final resolution will come soon.
“The MGC reminds Massachusetts residents that the safest place to wager, if they choose to do so, is with a legal regulated operator,” he added.
Online sports betting operators licensed in Massachusetts include Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, and theScore Bet. Brick-and-mortar sportsbooks include Encore Boston Harbor, MGM Springfield, and Plainridge Park Casino.
A spokesperson for Kalshi did not immediately respond to a request for comment.
Sportsbooks Joining Prediction Market Craze
Kalshi is not the only prediction market operator authorized to facilitate trades in the U.S. Several companies launched their own platform over the past year. That includes sports betting operators like Boston-based DraftKings, Fanatics, and FanDuel. Daily fantasy operators PrizePicks and Underdog have also joined.
However, where Kalshi and a few others allow traders across the country to purchase sports-related contracts, those involved in sports betting or fantasy have limited their sports markets to a select few states. That includes states yet to legalize sports wagering, such as California and Texas; states with only brick-and-mortar sportsbooks, like Mississippi; or states that limit wagering to a single operator, such as Florida where only Hard Rock Bet is available.
In states where sportsbooks already hold a sports betting license, they have limited their prediction market menus to other events, such as financial and economic outcomes.
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