Meta description: Kalshi asks a Massachusetts court to dismiss expanded sports-contract claims as CFTC lawsuits sharpen the federal preemption fight.

Tags: Kalshi, CFTC, Massachusetts, Andrea Joy Campbell, sports betting, prediction markets

Market platform: Kalshi

Category: Regulation

Kalshi asked a Massachusetts court on September 28 to dismiss Attorney General Andrea Joy Campbell’s expanded lawsuit over its sports event contracts, arguing that the Commodity Futures Trading Commission’s recent lawsuits against states strengthen its federal preemption defense. The filing came three days after a federal appeals court ruled against Kalshi in a parallel fight with Ohio and Tennessee.

What is Kalshi arguing in Massachusetts?

Kalshi’s core argument is that its sports event contracts are derivatives traded on a CFTC-registered exchange, not state-regulated sports wagers. Under that theory, the Commodity Exchange Act gives the federal regulator exclusive jurisdiction and preempts Massachusetts gambling law.

The company’s newer point is that the CFTC itself has moved aggressively to defend that jurisdiction. According to Law360’s account of Kalshi’s filing, the exchange argues that the CFTC’s recent lawsuits and rulemaking on prediction markets leave it in a stronger position than when Massachusetts first sued.

The CFTC is not a party to the Massachusetts Superior Court case, and its jurisdictional position is contested by state regulators. But the agency has become a central actor in the wider legal fight. In an April 28 press release announcing a suit against Wisconsin, the CFTC said it had also sued New York, Arizona, Connecticut and Illinois. A September DLA Piper tracker adds Minnesota to that list.

The Wisconsin release quoted the CFTC chairman saying, “States cannot circumvent the clear directive of Congress. Our message to Wisconsin is the same as to New York, Arizona, and others: if you interfere with the operation of federal law in regulating financial markets, we will sue you.”

The agency has also had at least one courtroom win. DLA Piper reported that in May 2026, a federal district court in Arizona granted the CFTC and the Department of Justice a preliminary injunction barring Arizona from enforcing its gambling laws against event contracts. The CFTC also filed an amicus brief backing Kalshi at the Massachusetts Supreme Judicial Court, according to the agency’s own release.

What CFTC rulemaking is Kalshi relying on?

Kalshi is also pointing to the CFTC’s June 10, 2026 proposal to amend Rule 40.11 and add a new Appendix F. DLA Piper describes the proposal as “a structured three-step framework for evaluating whether a given event contract is an excluded commodity.”

The comment period closed July 27. Forty-four states filed comments opposing the proposal, a measure of how broadly state officials reject the CFTC’s view even as Kalshi cites the rulemaking as support in state court.

What does Massachusetts’ amended complaint allege?

Campbell sued KalshiEX LLC in September 2025, alleging that the company was accepting online sports wagers without a license from the Massachusetts Gaming Commission. In late June 2026, Associate Justice Peter Krupp of Suffolk County Superior Court allowed the state to file a 71-page amended complaint, crypto.news reported.

The amended complaint goes beyond the licensing theory. It alleges that Kalshi marketed to people under 21 through outreach on college campuses and ads featuring people who appear underage, and that its age controls are inadequate.

The state’s core factual allegation is that “Kalshi allows anyone who is at least 18 years old to create an account and wager on sports events by purchasing event contracts.” Massachusetts law sets 21 as the minimum age for licensed sports wagering. That gives the attorney general a consumer-protection theory alongside the broader fight over whether federal commodities law displaces state gambling enforcement.

Can Kalshi offer sports contracts in Massachusetts right now?

Kalshi is still able to offer sports event contracts in Massachusetts while its appeal proceeds because the January injunction was stayed pending appellate review. The attorney general’s office announced in January that a Suffolk County Superior Court order would bar Kalshi from offering sports event contracts to Massachusetts customers unless the company complied with state sports wagering law, including by obtaining a Gaming Commission license. Bloomberg Law reported on February 18, 2026, that the ban would not take effect until after appellate review.

The legal issue is now before the Massachusetts Supreme Judicial Court, which took Kalshi’s appeal on direct appellate review. At oral argument on May 4, several justices sounded skeptical of Kalshi’s position, Courthouse News Service reported.

Justice Scott Kafker told Kalshi’s counsel, Grant Mainland of Milbank, “I just feel like you’re swimming upstream here.” Justice Dalila Wendlandt asked whether Congress would have been “more explicit” if it had meant to move sports gambling under federal oversight. Courthouse News Service described the argument as the first time a state high court had heard the question.

Thirty-eight state attorneys general filed a brief supporting Massachusetts on the same day the CFTC filed in support of Kalshi, Bettors Insider reported.

How does the Sixth Circuit ruling affect Kalshi’s motion?

The timing complicates Kalshi’s argument. On September 25, a unanimous three-judge panel of the U.S. Court of Appeals for the Sixth Circuit ruled that Ohio and Tennessee can enforce their gambling laws against Kalshi’s event contracts. The Block reported the decision the next day. The court affirmed Ohio’s win in the lower court and vacated the injunction Kalshi had obtained against Tennessee.

Writing for the panel, Judge Julia Smith Gibbons held that Kalshi had not shown its sports contracts qualify as “swaps” under the Commodity Exchange Act. She described gambling regulation as a core part of state police power. Rejecting the idea that some of the contracts serve a hedging purpose, she wrote, “There is no conceivable reason why the market might need to know the probability that a broadcaster says a random word on air.”

Kalshi spokesperson Dani Lever responded to the ruling by saying, “Markets can’t operate when the rules change at every state line.”

The Sixth Circuit decision leaves Kalshi with one federal appellate win and two losses. The Third Circuit sided with Kalshi 2-1 against New Jersey in April. The Ninth Circuit ruled against the company in the Nevada litigation in August. On September 2, New Jersey Attorney General Jennifer Davenport petitioned the U.S. Supreme Court to settle the question. Maryland’s appeal remains pending in the Fourth Circuit.

What happens next in Massachusetts?

Massachusetts now has two active tracks. Suffolk County Superior Court will rule on Kalshi’s motion to dismiss the amended complaint. Separately, the Massachusetts Supreme Judicial Court will decide Kalshi’s appeal of the January injunction, which it heard on May 4.

Both courts are weighing the CFTC’s lawsuits and proposed rule against a federal appellate record that now runs 2-1 in favor of state enforcement. The next national milestone is the U.S. Supreme Court’s decision on New Jersey’s September 2 certiorari petition. If the Court takes the case, the result could decide whether state gambling regulators can enforce their laws against federally registered prediction-market contracts.