Kalshi Wins Time in Massachusetts Sports Contracts Fight
Prediction market platform Kalshi and Massachusetts sparred over the terms of the preliminary injunction (PI) that the Commonwealth had won on Tuesday. Both sides were given new PI drafts to file, pushing back the decision of an injunction to a later date, which means users will continue to have access to Kalshi’s sports contracts in Massachusetts for the time being.
During Friday’s hearing, lawyers for Kalshi argued that the company needed 90 days to implement geofencing instead of the Commonwealth’s proposed seven. They also wanted to continue earning fees on contracts purchased before the PI but traded afterwards. Finally, Kalshi opposed deposit restrictions, arguing that customers who make deposits don’t reveal what they plan to buy with that money when it goes into their accounts, therefore it’s unfeasible to specifically limit deposits made for the purpose of trading sports.
The Commonwealth took the opposite stance on each of these issues. In particular, state regulators wanted to prevent Kalshi from earning fees on contracts traded after a PI went into effect. Massachusetts’ lawyers argued that trading sports contracts purchased before the PI still constituted illegal sports betting.
By the end of the hearing, Judge Christopher Barry-Smith had a tentative shape for the PI negotiations.
Judge opts for delay
Judge Barry-Smith decided that he would not implement an injunction until he had ruled on the issue of a stay pending appeal. He also wanted to give both sides time to reach an agreement on PI terms.
He leaned toward implementing an injunction that affected future contracts but not current ones. So, he appeared sympathetic to Kalshi’s request to have its current sports contracts traded as normal without allowing Massachusetts traders to buy new ones.
His preference appears to be allowing Kalshi and the Commonwealth to reach a deal instead of imposing one on them. He acknowledged that Kalshi is federally regulated and that Massachusetts represents only a small part of the country. However, he also argued that the Commonwealth has its own laws to enforce regarding sports contracts, preferring that the parties confront the complex reconciliation of those issues.
The extra two weeks to file new proposed PI agreements remains a win for Kalshi ahead of the Super Bowl.
Prediction markets gear up for Super Bowl
The Super Bowl is the largest sports competition in the United States and a major event for prediction markets. Polymarket had $1.2 billion in trading volume on the 2025 Super Bowl. Now that Kalshi, Crypto.com, and other CFTC-regulated platforms and brokers offer sports contracts, the Super Bowl will be a massive revenue opportunity for prediction market platforms.
Delaying the implementation of an injunction means Kalshi is closer to having live Super Bowl trading without limiting its market access. In a year that the New England Patriots have a shot at playing in the Super Bowl, Massachusetts will be a popular sports market during Sunday’s conference championship games — and possibly beyond.
Between the PI delay and Kalshi’s preferred geofencing timeline, the prediction market platform may be able to offer Super Bowl and even March Madness contracts to Massachusetts customers in 2026.