The Massachusetts Attorney General has sued Kalshi, accusing the platform of disguising sports betting as “event contracts.”
Kalshi has received cease-and-desist letters from seven states and sued three of them: Nevada, New Jersey, and Maryland. Massachusetts is the first state to go on offense.
“As part of today’s filing, the AGO is requesting that the court order Kalshi to cease offering sports wagering in Massachusetts while the lawsuit is pending.”
In other words, the @MassAGO is seeking an immediate preliminary injunction to block Kalshi from accessing MA. https://t.co/pbDIl2AFJN
— Daniel Wallach (@WALLACHLEGAL) September 12, 2025
The brief notes that Kalshi’s sports contracts meet all three of the state’s criteria for illegal gaming:
“First, users stake real money (consideration) to purchase binary contracts with the hope of receiving a monetary return (a prize) if they correctly predict the outcome (chance) of a future sports event. Most critically, chance predominates over skill in determining the outcome of these contracts. While users may conduct research or follow trends, they cannot influence or control the actual result of a sporting event. The event turns on external, uncertain factors, such as player performance, officiating, weather, and injuries. These factors are unknowable and beyond the bettor’s control.”
Massachusetts is seeking an immediate preliminary injunction to keep Kalshi’s sports contracts out of the state as the case progresses.
Strong MA brief after a weak Third Circuit showing
The Third Circuit Court of Appeals held oral arguments in Kalshi’s case against New Jersey on Wednesday. Kalshi won a preliminary injunction in that case, preventing NJ from enforcing its cease-and-desist while the case plays out, but the state appealed.
Observers like sports betting and gaming lawyer Daniel Wallach believe the round of oral arguments favored Kalshi. A key reason for that assessment was that New Jersey’s counsel began by focusing on the text of the Commodity Exchange Act (CEA) instead of the congressional intent argument that led to Maryland’s District Court victory.
Massachusetts’ brief makes the same arguments around event contracts on sports equating to gaming, as in the other state vs. Kalshi cases. However, the MA brief is unique in that it digs into some specific design elements on Kalshi’s platform that “mirror gambling psychology.” It claims, for example, that Kalshi’s “interface design subtly encourages high-risk transactions by emphasizing reward while obscuring risk.”
Kalshi’s NFL volume reaches record highs as court battles roll on
Kalshi’s legal battles haven’t stopped it from enjoying success in its first full NFL season. During the first weekend of NFL games, Kalshi did $266 million in Week 1 volume on NFL games alone. In fact, most of Kalshi’s trading volume has come from its sports category since fleshing out its menu to include all major mainstream sporting events.
With football underway, sportsbooks are squarely feeling the pressure of a federally-regulated competitor, and states that collect taxes from regulated sports betting want to put a stop to it. Kalshi may be a trading platform, but as a company that targets retail traders, it is competing for many of the same customers that wager on sports betting platforms.
With Massachusetts entering the legal affront against Kalshi, even without previously issuing a cease and desist, it’s quite possible that it won’t be the last state to join the fray.
