Polymarket Sues Massachusetts Ahead of Looming Ban of Kalshi Sports Markets
Polymarket has filed a federal lawsuit against Massachusetts, arguing that the state lacks authority to regulate its prediction market platform, asserting that only the Commodity Futures Trading Commission (CFTC) holds jurisdiction over such event contracts. This legal move comes after a Massachusetts judge enabled regulators to ban Kalshi, a rival platform, from offering sports markets in the state, leading to similar regulatory actions in Nevada against both Polymarket and Coinbase, which recently began hosting Kalshi-powered markets. State regulators view these platforms as unlicensed sports betting operations, while the companies claim federal preemption. The legal battles threaten a core part of the industry—sports markets, which constitute over 80% of Kalshi’s business. Despite setbacks in state courts, the platforms have received backing from CFTC Chair Mike Selig, who announced the agency's participation in ongoing lawsuits and affirmed support for federal oversight, even amid political pushback from figures like Rep. Alexandria Ocasio-Cortez. The outcome could set a national precedent on whether state or federal authorities control prediction markets in the United States.
