Judge Rules Kalshi Can’t Run Sports-Prediction Market in Massachusetts

A Massachusetts judge recently ruled that Kalshi, a prediction-markets operator, cannot allow state residents to place bets on sports through its online platform. This decision follows accusations from the state’s attorney general that Kalshi is violating gaming regulations.

Suffolk County Superior Court Judge Christopher Barry-Smith, based in Boston, announced that he would issue a preliminary injunction at the request of Massachusetts Attorney General Andrea Joy Campbell. This injunction will prohibit Kalshi from permitting users in Massachusetts to place financial bets on sporting events without the necessary license.

Judge Barry-Smith noted that Kalshi was fully aware that its business model, which involves betting on sports outcomes, would conflict with state enforcement regulations. Despite this knowledge, the company continued to operate in states like Massachusetts, where sports wagering entities are required to be licensed.

The judge intends for the injunction to be forward-looking, aiming to minimize disruption to Kalshi’s business while ensuring compliance with state law. A hearing has been scheduled for Friday to discuss the implementation of the ban and whether it should be paused pending an appeal.

While Kalshi has not commented on the ruling, the company has previously indicated its intention to appeal any injunction issued against it.

Based in New York, Kalshi allows users to profit from predictions on a variety of events, including sports, entertainment, politics, and economic developments. The company began offering contracts for sports events on a national scale in January.

Kalshi is currently involved in litigation with several other states that have accused it of violating gaming laws by allowing users to bet on the outcomes of sporting events such as football and basketball. However, Massachusetts is the first state to seek an injunction to halt Kalshi’s operations.

In a lawsuit filed in September, Attorney General Campbell argued that Kalshi was effectively offering sports wagering disguised as event contracts, all while failing to obtain a license from the Massachusetts Gaming Commission.

Her office contended that licensed gaming operators in the state are prohibited from offering sports wagering to anyone under 21. In contrast, Kalshi was allegedly providing an addictive betting product to consumers as young as 18, including high school students, without the necessary licensing.

Kalshi’s legal team countered that state gaming laws, such as those in Massachusetts, do not apply to its sports events contracts. They argue that these contracts fall under the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission.

(Reporting by Nate Raymond in Boston; editing by Deepa Babington)

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A Massachusetts judge recently ruled that Kalshi, a prediction-markets operator, cannot allow state residents to place bets on sports through its online platform. This decision follows accusations from the state’s attorney general that Kalshi is violating gaming regulations.

Suffolk County Superior Court Judge Christopher Barry-Smith, based in Boston, announced that he would issue a preliminary injunction at the request of Massachusetts Attorney General Andrea Joy Campbell. This injunction will prohibit Kalshi from permitting users in Massachusetts to place financial bets on sporting events without the necessary license.

Judge Barry-Smith noted that Kalshi was fully aware that its business model, which involves betting on sports outcomes, would conflict with state enforcement regulations. Despite this knowledge, the company continued to operate in states like Massachusetts, where sports wagering entities are required to be licensed.

The judge intends for the injunction to be forward-looking, aiming to minimize disruption to Kalshi’s business while ensuring compliance with state law. A hearing has been scheduled for Friday to discuss the implementation of the ban and whether it should be paused pending an appeal.

While Kalshi has not commented on the ruling, the company has previously indicated its intention to appeal any injunction issued against it.

Based in New York, Kalshi allows users to profit from predictions on a variety of events, including sports, entertainment, politics, and economic developments. The company began offering contracts for sports events on a national scale in January.

Kalshi is currently involved in litigation with several other states that have accused it of violating gaming laws by allowing users to bet on the outcomes of sporting events such as football and basketball. However, Massachusetts is the first state to seek an injunction to halt Kalshi’s operations.

In a lawsuit filed in September, Attorney General Campbell argued that Kalshi was effectively offering sports wagering disguised as event contracts, all while failing to obtain a license from the Massachusetts Gaming Commission.

Her office contended that licensed gaming operators in the state are prohibited from offering sports wagering to anyone under 21. In contrast, Kalshi was allegedly providing an addictive betting product to consumers as young as 18, including high school students, without the necessary licensing.

Kalshi’s legal team countered that state gaming laws, such as those in Massachusetts, do not apply to its sports events contracts. They argue that these contracts fall under the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission.

(Reporting by Nate Raymond in Boston; editing by Deepa Babington)

Topics
Trends
Legislation
Massachusetts