TLDR Massachusetts Supreme Judicial Court heard oral arguments on May 4 over whether Kalshi can offer sports-event contracts without a state gaming license Justices questioned how Kalshi’s products differ from traditional sports betting Kalshi argues only the federal CFTC has authority over its business under the Dodd-Frank Act Attorney General Andrea Campbell won a preliminary injunction in February to block Kalshi’s sports contracts in the state If the injunction holds, Massachusetts would become the second state after Nevada to block Kalshi through the courts
The Massachusetts Supreme Judicial Court heard oral arguments on Monday over whether prediction market platform Kalshi can continue offering sports-event contracts in the state. The case could determine whether Massachusetts becomes the second state to block the company through the courts.
Kalshi’s lawyer, Grant Mainland, argued that only the U.S. Commodity Futures Trading Commission has authority over the company’s business. He asked the court to overturn a preliminary injunction that blocks Kalshi from letting users place financial bets on football, baseball, and other sports without a state gaming license.
“This is fundamentally a federal regulatory issue,” Mainland told the court. Several of the seven justices pushed back on that claim during the hearing.
Justice Gabrielle Wolohojian pressed Mainland on how Kalshi’s products are different from traditional sportsbooks. “In what way do they differentiate from what would colloquially be known as a bet,” she asked.
Kalshi’s Federal Preemption Argument
Mainland pointed to the company’s registration with the CFTC. He argued that Kalshi’s sports contracts qualify as “swaps,” a type of financial derivative that Congress placed under exclusive CFTC oversight through the Dodd-Frank Act.
He also cited a recent ruling from the 3rd U.S. Circuit Court of Appeals in April. That court stopped New Jersey regulators from pursuing enforcement against Kalshi, backing the company’s position