Michaela
Massachusetts Attorney General Andrea Joy Campbell has launched a civil suit against Kalshi, accusing the federally regulated exchange of skirting state gambling laws by allegedly offering unlicensed sports betting disguised as “event contracts,” with more than $1 billion reportedly wagered across 3.4 million bets.
Key points:
- Massachusetts files a civil lawsuit against Kalshi, claiming its “event contracts” operate as unlicensed sports betting, with over $1 billion wagered across 3.4 million bets.
- The state seeks damages, penalties, and an injunction to stop Kalshi from taking sports wagers, citing underage participation, weak gambling safeguards, and aggressive marketing.
- Kalshi argues it is federally regulated by the CFTC as a Designated Contract Market, treating contracts as financial instruments rather than gambling, and defends its business model.
According to the September 12 court filing, the Commonwealth of Massachusetts is pursuing damages, civil penalties, and a permanent injunction to bar Kalshi from taking sports wagers without authorization from the Massachusetts Gaming Commission. The filing also alleged that the platform processed more than $1 billion in bets between January and June 2025.
“The foregoing unlawful conduct exposes residents of the Commonwealth to a plethora of harms, including but not limited to, the public health risks associated with compulsive gambling — a clinically recognized behavioral addiction — and disastrous financial losses,” the filing stated.
Furthermore, the filing alleges that Kalshi’s binary “yes or no” event contracts effectively replicate conventional sports betting while evading regulatory oversight. Prosecutors argue the platform provides moneyline contracts, point spreads, over-under bets, and proposition wagers that closely resemble the products of licensed sportsbooks.
The complaint also notes that while Massachusetts law sets the minimum age for sports wagering at 21, Kalshi permits users as young as 18 to participate. Regulators further criticized the platform for offering weaker responsible gambling protections than licensed operators and pointed to its aggressive marketing efforts through television, social media, and partnerships with Robinhood.
The lawsuit seeks a court order requiring Kalshi to halt its operations in Massachusetts while the case proceeds.
The company is registered with the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market, giving it federal oversight under U.S. derivatives law. This registration distinguishes Kalshi from traditional sports betting platforms, as its contracts are treated as financial instruments rather than gambling in the eyes of federal regulators.
Kalshi maintains that the CFTC’s regulation covers its offerings and has defended its business model, noting the distinction between federally regulated event contracts and state-licensed betting.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
