Kalshi, a prediction market platform, is preparing to contend with a lawsuit from Massachusetts, which claims the company is offering unlicensed sports betting to its residents. The lawsuit alleges that Kalshi misrepresents sports wagering as 'event contracts' and violates state gambling laws. As of May 2025, it was noted that over 75% of Kalshi’s trading volume comes from sports, surpassing major competitors like DraftKings and FanDuel. In response, Kalshi maintains that it is regulated by the Commodity Futures Trading Commission (CFTC) and not subject to state gambling laws. The company believes that Massachusetts is relying on outdated regulations rather than engaging in constructive dialogue. This legal challenge follows cease-and-desist orders issued to Kalshi by other states, including Arizona and Illinois. Meanwhile, other blockchain-based prediction markets, such as Polymarket, are also navigating their own regulatory landscapes, suggesting a broader trend of legal scrutiny in this innovative sector.

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