The Kalshi prediction market is violating state laws of Massachusetts, its attorney general alleged in a lawsuit on Friday.
The attorney general Andrea Joy Campbell alleged in a presentation that the sports events contracts, which Kalshi introduced in January 2025, violates the sports sports laws of the state, which require the operators to be licensed. Campbell is asking a court to prevent Kalshi from offering sports prediction markets in the state without a license, as well as to seek monetary relief and another.
Prediction markets have grown in popularity in recent years, with cryptographic -centered companies such as Polymarket and companies like Kalshi that see immense interest on questions such as who would win the latest presidential elections. While the presentation of Massachusetts points out that Kalshi offers these different categories of prediction markets, its only position focuses on bets related to the company’s sport.
The presentation said that Kalshi’s prediction markets, which are structured as binary options, operate in the same way that the products of licensed sports operators do so, comparing it with Fanduel as an example.
“Kalshi is in the business of accepting bets, defined as” a sum of money or risk thing in an uncertain occurrence of amateur sporting events and professionals in the form of sale of sports events contracts, “said the presentation, adding,” Kalshi sporting contracts constitute sports spots “as defined by Massachusett’s laws and applicable regulations.
Kalshi had gone through a long legal fight at the federal level when he fought with the futures trade commission of the basic products about the legality of his business model, but the regulator finally retreated earlier this year. Now, one of the members of the Kalshi Board, former CFTC Commissioner Brian Quintenz, is President Donald Trump’s candidate to lead the agency.
A part of Massachusetts’s demand points to Kalshi’s actions that the Office of the Attorney General alleges that they are designed to hook possible apostators.
“The Kalshi platform uses behavioral design mechanisms extracted from the psychology of the game, including the characteristics that foster impulsive participation, exploit the anticipation of awards and decrease the perception of users on financial risk,” the presentation said.
He pointed out the design of the Kalshi website, including the presentation of possible payments in “Bright Green Source, a color that indicates security and correction”, while the probabilities were presented at the black source. “This interface design fosters subtly high -risk transactions by emphasizing the reward while darkening the risk.”
Campbell said “if Klashi wants to be in the sports games business in Massachusetts, they must obtain a license” in a statement. “The sports bet has a significant risk of addiction and financial loss and must be strictly regulated to mitigate the consequences of public health.”
In a statement, a Kalshi spokesman said: “Kalshi offers its users a fair, transparent market, regulated by the federal government and national level. Instead of participating in a dialogue with Kalshi, as many other states have done, Massachusetts is trying to block Kalshi’s innovations when trusting the laws and ideas outdated. In this technology and is ready to defend it once again in a court of justice. “
