Massachusetts AG files lawsuit against Kalshi for offering ‘illegal and unsafe’ sports betting
Attorney General Andrea Joy Campbell stated Kalshi allegedly uses an online exchange platform to offer sports wagering to consumers under the ‘guise of sports events contracts.’
Key Points
- Campbell filed the lawsuit in Suffolk Superior Court on September 12, accusing Kalshi of failing to follow Massachusetts law which governs sports betting, such as licensure by the MGC
- The Massachusetts Attorney General also requested the court order the predictions market platform to cease operations throughout the state while the lawsuit is pending
Massachusetts Attorney General Andrea Joy Campbell filed a lawsuit against predictions markets platform KalshiEX in Suffolk Superior Court on September 12, accusing Kalshi of failing to follow state law which governs sports betting, such as licensure by the Massachusetts Gaming Commission (MGC), while offering “illegal and unsafe sports betting.”
“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” Campbell said.
“This lawsuit will ensure that if Kalsi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws. I am grateful for the ongoing partnership with the Gaming Commission.”
Campbell went on to accuse Kalshi of using an online exchange platform to offer sports wagering to consumers under the “guise of sports events contracts,” allowing bettors to select a “yes” or “no” option depending on the likelihood of an event to occur. The Attorney General also requested the court order Kalshi to cease operations throughout Massachusetts while the lawsuit is pending.
“These ‘event contracts’ closely resemble sports wagers offered by licensed operators,” the Massachusetts Attorney General’s Office said as part of the statement.
“The platform actively promotes its sports wagering offerings on television and social media and allows ‘trading’ through retail trading platforms like Robinhood.”
Good to know: Massachusetts Representative David Muradian introduced HB 4431 on August 20, which would prohibit any online game, contest or promotion that simulates casino gaming, lottery or sports betting and utilizes a dual-currency system of payment
“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes and other consumer protections,” MGC Chairman Jordan Maynard said.
“We look forward to our continued partnership with Attorney General Campbell and her office.”
Within the lawsuit, Campbell alleges Kalshi’s unlawful sports wagering offerings have been provided without “key consumer protections” required of licensed operators conducting business in Massachusetts, such as “comprehensive processes” performed by the MGC and compliant self-limiting options.
The Attorney General’s Office also stated Kalshi has “neither applied for nor received” a sports wagering license from the MGC, as required by state law.
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