A Massachusetts Superior Court judge has ordered prediction market Kalshi to implement statewide geofencing within 30 days, effectively barring the platform from offering sports event contracts in the commonwealth.
In a ruling delivered just two days before Super Bowl LX, Judge Christopher K. Barry-Smith upheld a preliminary injunction requested by the state, finding that Kalshi has been operating as an unlicensed sports wagering entity.
The court also denied Kalshi’s motion for an emergency stay of the injunction, prompting the company to file a notice of appeal.
The decision addresses a legal conflict over whether event-based contracts constitute financial derivatives or illegal gambling. Judge Barry-Smith also stated that federal law does not remove state authority over gambling.
The Commodity Exchange Act does not prohibit state regulation of gambling, according to the court’s decision.
Judge Barry-Smith stated that Kalshi’s engagement loop and countdown clock resemble digital gambling, and that the definition of sports betting is more applicable than financial trading.
Massachusetts filed its lawsuit last September, alleging that Kalshi failed to implement consumer protection requirements for licensed gaming operations.
Sports event contracts have made up around 75% of Kalshi’s trading volume since 17 May 2025, according to the suit.
However, it alleges that Kalshi failed to implement adequate restrictions on consumers aged 18-21, which is below Massachusetts’s sports betting age limit of 21.
The prediction market operator also failed to go through the licensing process with the Massachusetts Gaming Commission and, as such, failed to implement consumer protections for gaming addiction and financial harm.
Bottom line still intact
The implementation of geofencing will require Kalshi to use technical controls to prevent users within Massachusetts’ borders from entering new sports-related positions.
While existing contracts may be settled, the court also prohibited the expansion of any current wagers.
The injunction comes as Massachusetts maintains a significant position in the national market, ranking eighth in sports betting handle.
Based on preliminary results, however, the injunction did not have a major impact on Kalshi’s Super Bowl-related markets.
Kalshi has consistently argued that its status as a designated contract market under the Commodity Futures Trading Commission provides it with exclusive federal protection.
However, the Superior Court determined that state gaming regulators retain the power to enforce local statutes when products function as wagers.
The 30-day deadline for geofencing represents a compromise from the 90 days requested by the company, which argued that a rapid exit would disrupt its financial ecosystem.
The litigation in Massachusetts is part of a broader series of challenges facing the prediction market industry.
Similar disputes are pending in Nevada and Connecticut, where regulators have also moved to categorise sports contracts as unlicensed gambling.
Following the denial of its stay, Kalshi must now comply with the technical requirements to block Massachusetts residents while its appeal proceeds through the judicial system.