The state of Massachusetts was granted a preliminary injunction against Kalshi and its sports predictions Tuesday.
The Superior Court ruling says the two sides could not resolve “certain details” of Massachusetts’ requested injunction, “including how to prohibit new contracts without impacting already existing contracts.”
A schedule to implement the injunction by Friday was detailed in the release, and the court will hear either side should they request a hearing at noon that day. Kalshi could submit a motion for a stay concerning the injunction and appeal the ruling to the state’s Appeals Court.
Kalshi did not respond to a request for comment by publication.
Sports predictions not preempted by federal law
Kalshi’s main claim is that any attempt by Massachusetts to regulate its exchange is preempted by federal law, but the ruling disagrees.
Express preemption from Congress only occurs when the federal statute “explicitly confirms” the intention to preempt state law. Implied preemption, meanwhile, only occurs in two ways: field preemption or conflict preemption.
Kalshi said its sports predictions are field-preempted, but the ruling said Kalshi’s view is “overly broad” (emphasis from ruling):
“Although I agree that the exclusive jurisdiction provision evidences an intent to preempt some state law, I disagree that it extends as far as state gaming laws. While it would make sense for Congress to displace a state’s targeted attempt to regulate a derivative market, for example, or to clarify the roles of separate federal agencies, as addressed in Merrill Lynch, that logic does not suggest Congress intended to displace traditional state police powers, such as gambling regulation – particularly in the absence of the express language so stating.”
Looking at the Commodity Exchange Act “as a whole” further supports the lack of preemption, the ruling reads.
Nevada ruling cited
The ruling also cited Kalshi’s case in Nevada:
“As the Nevada District Court observed in ruling against Kalshi in similar litigation, if indeed Congress had intended ‘such a sea change’ in the regulatory landscape of gambling regulation, surely it would have said so explicitly.”
Conflict preemption does not fit
Kalshi made various arguments concerning conflict preemption, though the order notes the arguments are all variations on a theme of “chaos” that would disrupt Congress’ intent for CFTC regulation.
“For many of the reasons already discussed, the arguments are unavailing. Requiring Kalshi to become licensed to offer its sports related event contracts in Massachusetts neither displaces federal derivatives regulations or enforcement efforts, nor frustrates Congress’s purpose in consolidating regulatory power in the CFTC.
“The Sports Wagering Law is an exercise of traditional state police power. It imposes an additional regulatory burden on an event contract platform that seeks to offer sports related event contracts, in service of the public health. It is not a competing attempt to regulate derivatives markets, or an outright ban on event contracts in the state.
The order ruled Massachusetts is likely to win its case since Kalshi failed to establish that the CEA preempts the state’s Sports Wagering Law.
Case relevant to public interest
Because Massachusetts Atty. Gen. Andrea Campbell brought the lawsuit, the court had to decide “whether a preliminary injunction order promotes the public interest.”
The Sports Wagering Law is in place to make sure licensed entities work to avoid taking illegal and underage bets as well as help with problem gambling addiction, the order reads.
“There is no real question that licensure, and the consequent oversight, of sports wagering operations in the state serve both public health and safety, and the Commonwealth’s financial interest. Seeking enforcement against non-complying entities also serves the public interest of fair competition and equal oversight among all sports wagering operations in the state.”
Kalshi argued the injunction would hurt its Massachusetts customers, but the injunction is only forward-looking which minimizes the disruption to Kalshi to comply with state law. Its other remaining points were “not compelling” to the court.
Inconsistent language addressed
Kalshi’s similarities to other digital gambling experiences in Massachusetts were noted in the “Legal and Factual Background” section of the ruling.
“The manner in which Kalshi’s contracts are offered mirrors other digital gambling experiences, including through continuous feedback and engagement loops that are modeled after operant conditioning and slot machine dynamics, leaderboard rankings, and countdown clocks,” the ruling said.
The section hit on Kalshi’s use of gambling lingo, noting the platform is still using terms like point spread, over/under, proposition and parlay in sports contracts. Kalshi advertising itself as “the first nationwide legal sports betting platform” and CEO Tarek Mansour‘s comments about Kalshi’s offerings being bets were also noted.
Sports predictions exploded quickly
The ruling gave some insight into the early days of sports predictions and just how much Kalshi’s volume exploded from them.
Kalshi launched sports predictions in January 2025. In a period from Feb. 25 to May 17 last year, sports predictions made up about 70% of volume. That number is up to 90% now.
The platform “profited more from its sports-related event contracts than licensed sports wagering platforms Draftkings [sic] and Fanduel [sic] during the same timeframe,” the ruling reads.
