The Kalshi prediction market violates the laws on the state games of Massachusetts, according to its Attorney General in a trial on Friday.
The attorney general Andrea Joy Campbell said in a file that the contracts of sporting events, which Kalshi, introduced in January 2025, violate the laws of sports betting of the State, which require that the operators be authorized. Campbell asks a court to prevent Kalshi from providing sports prediction markets in the state without license, as well as requesting monetary and other repairs.
The prediction markets have gained popularity in recent years, with companies focused on crypto such as Polymarket and companies like Kalshi by seeing immense interest on issues such as which would gain the last presidential election. While the deposit of Massachusetts notes that Kalshi offers these different categories of prediction markets, its solitary office focuses on the sports betting of the company.
The file said that Kalshi’s prediction markets, which are structured as binary options, exploit the same way as the products of approved sports operators, comparing it to Fanduel as an example.
“Kalshi is accepting betting, defined as” a sum of money or a risky value for an uncertain event “on amateur and professional sporting events in the form of contracts for sporting events”, said the file, adding “, Kalshi sporting event contracts constitute sporting statements” “as defined by the laws and applicable massachuses regulations.
Kalshi had gone through a long legal battle at the federal level when he fought with the Comedity Futures Trading Commission concerning the legality of his commercial model, but the regulator finally fell earlier this year. Now, one of the members of the board of directors of Kalshi, the former CFTC commissioner, Brian Quintenz, is the candidate of President Donald Trump to lead the agency.
Part of the Massachusetts trial indicates that Kalshi’s actions according to the prosecutor’s office are designed to hang possible bettors.
“The Kalshi platform uses behavioral design mechanisms from the game psychology, including functionalities that encourage impulsive engagement, the exploitation of the anticipation of the allocation and perception of users of the financial risk,” said the file.
He underlined the design of the Kalshi website, in particular by presenting possible payments in “Bright Green Font, a color that signals security and accuracy”, while the chances were presented in black police. “This interface design subtly encourages high -risk transactions by emphasizing the reward while obscuring the risk.”
Campbell said: “If Klashi wants to be in the sports games sector in the Massachusetts, they must obtain a license” in a press release. “Sports betting has a significant risk of dependence and financial loss and must be strictly regulated to mitigate the consequences of public health.”
In a press release, a spokesperson for Kalshi said: “Kalshi offers its users a fair, transparent market, regulated by the federal government and at the national level. Rather than dialogue with Kalshi as many other states have done, Massachusetts tries to block Kalshi innovations based on laws and ideas. And is ready to defend it once again before a court. “
