Kalshi faces a major setback in Massachusetts after a judge granted a preliminary injunction requiring the platform to delist sports contracts. Judge Christopher K. Barry-Smith ruled Tuesday that:
“The Commonwealth is entitled to a preliminary injunction prohibiting Kalshi from offering sport-related event contracts in the absence of the required license under the Sports Wagering Law.”
The ruling comes ahead of a final hearing scheduled for Friday, which will clarify the details of the shutdown. If the order is signed as expected, Kalshi must remove sports-related contracts from users’ access in Massachusetts immediately.
A Potential State-Level Precedent
The Massachusetts decision could have far-reaching implications for Kalshi’s operations in other states, including Nevada and Tennessee. The platform has long maintained that its prediction markets fall under federal jurisdiction, regulated by financial laws rather than state gambling statutes. Historically, Kalshi has pursued federal courts to resolve disputes.
While Kalshi enjoyed a string of victories in early 2025—winning injunctions in New Jersey and Nevada—the tide shifted later in the year. In August, a federal judge in Maryland denied a restraining order request, and since then, state courts have increasingly ruled against the platform.
This case highlights a growing trend: states are bypassing cease-and-desist orders and bringing Kalshi directly into state courts, where they often hold the upper hand. Kalshi’s strategy of immediately appealing to federal courts may no longer be as effective as it once was.
Impact on Non-Sports Contracts
The ruling specifically targets sports contracts, which represent roughly 90% of Kalshi’s trading volume according to Dune.com. Political, financial, and other event contracts may remain active, but their future profitability in Massachusetts remains uncertain.
Judge Barry-Smith noted during the hearing that certain details regarding new versus existing contracts were not resolved. How Kalshi adjusts its platform in response could significantly reshape its offerings. In contrast, competitors like Polymarket rely less heavily on sports contracts—about 37% of their volume—which may insulate them from similar rulings.
Broader Implications
Kalshi’s legal battles continue across multiple states. The company recently secured a stay in Nevada, while a Tennessee judge temporarily blocked the local gaming regulator from enforcing a cease-and-desist order. Analysts predict these disputes could eventually reach the Supreme Court, potentially establishing a nationwide precedent for online prediction markets.
The Massachusetts ruling has already influenced regulators elsewhere. The New York State Gaming Commission cited the decision as supplemental authority in its ongoing case against Kalshi, signaling that state regulators view this as a significant legal victory.
The final hearing on Friday, January 23, will likely determine the immediate scope of the injunction and the future of sports contracts on the platform. For now, Kalshi faces one of its most consequential legal challenges to date.
