Polymarket Sues Massachusetts Ahead of Looming Ban of Kalshi Sports Markets

Sander Lutz

Tue, February 10, 2026 at 5:07 AM GMT+9 2 min read

Polymarket went on the offensive Monday in the ongoing battle of prediction markets against Massachusetts regulators, claiming in a federal lawsuit that the state lacks authority to regulate its platform.

Last month, a Massachusetts judge gave a green light to regulators seeking to temporarily ban Polymarket rival Kalshi from offering sports markets in the state. On Friday, the court issued an order requiring Kalshi to geofence Massachusetts from its sports-related markets within 30 days.

Should it go into effect, the preliminary injunction would be the first of its kind restricting the ability of prediction market platforms to offer certain wagers to American customers.

For months, platforms like Polymarket and Kalshi have argued state regulators have no jurisdiction to regulate sports-related prediction markets, which they say are technically event contracts under the federal jurisdiction of the CFTC.

Regulators in states including Massachusetts have countered that such markets are just unlicensed sports betting operations subject to state laws. Last week, a Nevada judge paved the way for regulators to temporarily ban Polymarket’s sports-related wagers in the gambling-centric state.

“Racing to state court to try to shut down Polymarket U.S. and other prediction markets doesn’t change federal law,” Polymarket Chief Legal Officer Neil Kumar said Monday. “States like MA and NV that have done so will miss an amazing opportunity to help build markets for tomorrow.”

Though fierce competitors, Polymarket and Kalshi are now fighting side by side to protect their mutually endangered business models. The fate of sports markets is crucial: such markets represent more than 80% of Kalshi’s business, according to data from Dune.

Crypto mainstay Coinbase has gotten involved, as well. After launching Kalshi-powered prediction markets across the United States last month, Coinbase found itself targeted by state regulators in Nevada as well. Over the weekend, the company’s attempt to have a federal court intervene in the lawsuit was swiftly shut down.

Massachusetts Can Ban Kalshi Sports Markets for Now, Judge Rules

Though the companies have faced a string of setbacks in state court, they recently gained a new ally in CFTC Chair Mike Selig. Selig recently announced that the CFTC will be participating in prediction market-related lawsuits, advocating for their regulation at the federal level.

Over the weekend, Selig—the sole commissioner currently operating the CFTC—appeared to relish Democrats’ rising opposition to his aggressively pro-prediction market stance.

In response to criticism from Rep. Alexandria Ocasio-Cortez (D-NY) regarding the rise of Kalshi and Polymarket, Selig replied: “CFTC officially back on track.”

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