A Massachusetts judge has allowed state authorities to expand their lawsuit against prediction markets platform Kalshi, extending the legal fight over whether the company’s sports event contracts should be regulated as online sports wagering.
In a Tuesday filing in Suffolk County Superior Court, associate justice Peter Krupp permitted Massachusetts regulators to submit a 71-page amended complaint, adding new allegations to the state’s initial case that Kalshi violated Massachusetts law by offering sports-related wagering without the required authorization.
Key takeaways
- A Massachusetts judge allowed the state to file a 71-page amended complaint against Kalshi, keeping the case active.
- The expanded allegations claim Kalshi’s product effectively functions as sports wagering and that its marketing may reach people under 21.
- Massachusetts’ argument hinges on whether Kalshi must be licensed through the Massachusetts Gaming Commission to comply with state rules.
- The dispute also sits within a wider US battle over whether the CFTC has “exclusive jurisdiction” over prediction markets.
- Gaming and tribal groups are separately pushing Congress for clearer rules through the CLARITY Act.
Expanded allegations in the Massachusetts case
The Tuesday ruling clears the way for Massachusetts authorities to strengthen their claims as the case continues. According to the court filing, the amended complaint builds on earlier allegations that Kalshi engaged in sports wagering in a way that violates state law.
The state’s updated pleading includes accusations that the platform “targets those under 21 years of age” and does not do enough to prevent underage users from accessing the product. The complaint points to Kalshi’s marketing practices and to ad creative that, the filing alleges, shows individuals who appear younger than 21.
Massachusetts authorities also reiterated that Kalshi permits users from age 18 to create accounts and place wagers on sports events by purchasing event contracts, framing that accessibility as incompatible with the state’s approach to online sports wagering.
How the dispute started—and what the judge previously ordered
Massachusetts Attorney General Andrea Joy Campbell announced the lawsuit in September 2025, arguing that Kalshi needed to be licensed by the Massachusetts Gaming Commission to comply with state rules governing online sports wagers.
Earlier developments escalated the dispute quickly. In January, a judge issued a preliminary injunction barring Kalshi from offering sports event contracts while the case was reviewed.
With the latest amended complaint allowed by the court, Kalshi now faces a more detailed version of the state’s allegations as it continues fighting the legality of its sports contracts under Massachusetts law.
Cointelegraph reached out to Kalshi for comment, but did not receive an immediate response. After the initial complaint was filed, a Kalshi spokesperson had said the company was “ready to defend” itself in court.
The federal-versus-state jurisdiction fight over prediction markets
The Massachusetts case is only one part of a broader regulatory tug-of-war in the US. In parallel with state-level enforcement efforts, the CFTC has supported the view that prediction markets fall within its authority.
In April, the CFTC filed a brief in Massachusetts arguing that it had “exclusive jurisdiction” over prediction markets. The agency’s position, under Chair Michael Selig, is that event contracts offered by platforms like Kalshi are “swaps” under the Commodity Exchange Act and therefore should not be governed by state regulation.
As Selig put it in remarks associated with the agency’s stance, Congress has entrusted the CFTC with sole authority to regulate commodity derivatives markets, including prediction markets—and he warned that states attempting to override federal law would face legal challenges.
Why this matters beyond Kalshi: a policy push for the CLARITY Act
Even as the legal arguments could eventually move toward higher courts, some industry and stakeholder groups are urging lawmakers to address the jurisdictional uncertainty with legislation.
Earlier this month, national gaming and tribal organizations and labor groups asked US senators to add language to the Digital Asset Market Clarity (CLARITY) Act. Their request is aimed at explicitly prohibiting event contracts tied to sports and casino-style gaming.
The CLARITY Act—currently under consideration in the Senate—is expected to shape how the CFTC’s authority over digital assets and related market activities is defined. In that context, stakeholders pushing for restrictions on sports and casino-style event contracts are effectively seeking legislative clarity to reduce the need for repeated state-by-state court battles.
Cointelegraph has also reported that the legal landscape for Kalshi and similar platforms has varied by jurisdiction, including instances where the company was blocked from offering sports bets in certain locations.
What to watch next
For market participants and platform users, the next key developments are procedural and strategic: Massachusetts will attempt to sustain its expanded claims after the preliminary injunction, while Kalshi’s defense will likely continue confronting the CFTC’s argument for exclusive federal oversight. At the same time, the direction of the CLARITY Act could determine whether US prediction markets face a patchwork of state litigation or a more uniform regulatory framework.
