Polymarket has filed a lawsuit in an attempt to block Massachusetts from applying state gambling laws to its prediction market platform.
The complaint, filed in federal court yesterday (9 February), argues the state is overreaching into federally regulated territory. Polymarket says it operates as a derivatives exchange subject only to oversight by the Commodity Futures Trading Commission (CFTC).
The lawsuit names Massachusetts Attorney General Andrea Joy Campbell and senior officials of the Massachusetts Gaming Commission as defendants.
According to the filing, any state enforcement effort against Polymarket would be preempted by the Commodity Exchange Act. That statute, the company argues, gives the CFTC exclusive authority over derivatives exchanges operating on designated contract markets.
The suit also claims Congress designed the framework to ensure national uniformity and prevent state-by-state regulatory fragmentation.
The lawsuit follows a state court injunction obtained by Massachusetts against Kalshi on 6 February, which bars the company from offering sports-related event contracts to users located in the Commonwealth.
Polymarket argues the action signals an imminent risk of similar enforcement against its own platform, despite its federal licensing and compliance obligations.
Polymarket received designation as a contract market from the CFTC in July 2025.
The complaint states that the contracts it offers qualify as swaps under federal law and fall squarely within the CFTC’s exclusive jurisdiction, even when the underlying subject involves sports.
Polymarket: Sports prediction markets not akin to sports betting
The filing leans heavily on the prediction markets operator’s argument that there is a sharp distinction between prediction markets and sportsbooks.
Unlike sportsbooks, which operate under state licences and set odds internally, event contract prices are determined by supply and demand among market participants.
Polymarket states that it does not act as a counterparty to trades and instead charges a flat transaction fee, regardless of the outcome.
The company warns that state enforcement would cause it immediate and irreparable harm. Alleged impacts include disruption of nationwide liquidity, termination of banking and commercial relationships, and loss of user trust.
The complaint also highlights potential exposure to civil penalties and criminal sanctions under Massachusetts law, creating, it says, a conundrum between complying with federal authorisation requirements and yielding to state pressure.
In seeking declaratory and injunctive relief, Polymarket, which has also become a target in Nevada and other states, asks the court to affirm that Massachusetts gaming laws are preempted as applied to its exchange.