Massachusetts AG Amends Lawsuit Against Kalshi Over Sports Betting
Vexoda Newsroom
The Massachusetts Attorney General has amended a lawsuit against prediction markets platform Kalshi, alleging that the company targets users under 21 and engages in sports wagering without proper lice
Massachusetts Attorney General Andrea Joy Campbell has filed an amended complaint against Kalshi, a major player in prediction markets, after receiving approval from Judge Peter Krupp on Tuesday. The new allegations include targeting users under 21 years old through social media and marketing on university campuses.
Kalshi is accused of allowing anyone aged at least 18 to create accounts and wager on sports events by purchasing event contracts, despite the company being blocked in some jurisdictions for offering such bets. This legal action underscores the ongoing regulatory challenges facing prediction markets companies like Kalshi and Polymarket as they operate across state lines.
Background shows that Massachusetts first filed a lawsuit against Kalshi in September 2025, alleging that the platform needed to be licensed by the Massachusetts Gaming Commission (MGC) for compliance with state laws on online sports wagers. In January, a judge granted a preliminary injunction barring Kalshi from offering these bets while the case was under review.
The amended complaint also highlights concerns about Kalshi’s marketing practices targeting younger users and its failure to adequately prevent underage participation. This is particularly relevant given that prediction markets often attract young tech-savvy users who may be more inclined towards such platforms.
Kalshi faces not only state-level scrutiny but also federal involvement, as the US Commodity Futures Trading Commission (CFTC) has argued for exclusive jurisdiction over event contracts on these platforms. CFTC Chair Michael Selig stated that these contracts are covered by the Commodity Exchange Act and should be regulated federally rather than at the state level.
This legal dispute is part of a broader trend involving multiple states and prediction markets companies, with some groups advocating for federal legislation to provide clarity in this area. The Digital Asset Market Clarity (CLARITY) Act, currently under consideration by Congress, aims to address these issues but faces significant challenges as well.
Traders should watch the outcome of this legal battle closely, as it could have broader implications for how prediction markets are regulated and operate. Kalshi’s response remains pending, with a spokesperson stating that the company is ready to defend itself in court.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.