<h2 id="prediction-markets-news">Prediction Markets News</h2>
Massachusetts regulators secured court authorization Tuesday to temporarily block Kalshi from operating sports prediction markets in the state, delivering the first preliminary injunction against a prediction platform in U.S. history.
Suffolk County Superior Court Judge Christopher Barry-Smith <a href="https://www.reuters.com/world/kalshi-cannot-operate-sports-prediction-market-massachusetts-judge-rules-2026-01-20/" rel="noopener noreferrer nofollow">granted</a> the order following a request from Attorney General Andrea Joy Campbell, who sued Kalshi last September over alleged unlicensed sports wagering. The injunction could force Kalshi to cease sports-related operations in Massachusetts as early as Friday while litigation proceeds.
Preliminary injunctions require judges to find reasonable likelihood that the requesting party will prevail in the underlying case. Barry-Smith's decision suggests Massachusetts has built a credible argument that Kalshi's sports contracts constitute gambling under state jurisdiction rather than commodity derivatives regulated federally by the CFTC.
The ruling noted Kalshi previously marketed itself as "the first nationwide legal sports betting platform" before adjusting its language to describe event-based trading and investments. Barry-Smith wrote that Kalshi's contract offerings mirror digital gambling experiences found on traditional betting platforms.
Sports contracts generate over 80% of Kalshi's business volume, with the platform processing more than $26 billion in sports-related trades since launching the category roughly a year ago. Data from Dune Analytics <a href="https://dune.com/queries/5906817/9541263" rel="noopener noreferrer nofollow">shows</a> the sports vertical dominates Kalshi's overall activity across prediction markets.
Legal expert Daniel Wallach, who specializes in gaming regulation, characterized the Massachusetts decision as highly significant for the prediction market sector. The injunction establishes a precedent that could enable similar state actions against Polymarket and other platforms, arguing their services fall under federal commodity trading rules.
Kalshi and competitors have maintained that event contracts differ fundamentally from sports bets because users trade on outcomes rather than placing wagers against a house. This distinction forms the core of their argument for CFTC oversight rather than state gambling licenses. Massachusetts regulators reject this framing, arguing that the practical function matches traditional sports betting regardless of technical structure.
The court action arrives during heightened regulatory scrutiny of prediction platforms globally. Portugal and Hungary both announced Polymarket bans on Friday, citing illegal gambling concerns. The coordinated moves demonstrate growing international pressure on crypto prediction markets operating across jurisdictions with varying legal frameworks.
State enforcement actions against prediction platforms had previously yielded some successes but stopped short of injunctive relief. The Massachusetts order represents the first instance where a U.S. court compelled a platform to halt operations pending full case resolution, potentially reshaping how prediction markets approach state-level blockchain regulation.

Massachusetts Court Bans Kalshi Sports Prediction Markets

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