Massachusetts Attorney General Andrea Joy Campbell has already signed her name to an amicus brief challenging the legality of Kalshi and other groups offering sports event contracts. Now she is mounting a singular campaign against the financial firm.
MA AG and MGC both involved in Kalshi lawsuit
On Friday, Campbell filed suit in Suffolk Superior Court against Kalshi, alleging that the group is offering what the state believes is illegal sports betting.
“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” said Campbell. “This lawsuit will ensure that if Kalsi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws. I am grateful for the ongoing partnership with the Gaming Commission.”
As Campbell noted, the action was taken in tandem with the Massachussets Gaming Commission (MGC).
“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections. My fellow commissioners and I appreciate the Attorney General’s efforts to enforce the law and hold these companies accountable to Massachusetts’ rigorous standards,” said MGC Chair Jordan Maynard. “We look forward to our continued partnership with Attorney General Campbell and her office.”
Maynard has taken shots at Kalshi attitudes before
Maynard took exception to the attitude of Kalshi independent counsel Josh Sterling’s comments at a meeting of the National Council of Lawmakers from Gaming States (NCLGS) in which the responsibility for making fiscally responsible investments on event contracts is up to the individual.
“People are adults, and they’re allowed to spend their money however they want it, and if they lose their shirt, that’s on them,” Sterling noted at the time.
Later in the conference, Maynard appeared on a panel and offered his own thoughts on the matter.
“I hear someone on a panel the other day say ‘if someone loses their shirt, who cares?’ We f***ing care.”
The lawsuit covers much of the same ground as the other lawsuits in three other states involving Kalshi and state gaming regulators. The brief covers the widespread nature of the MGC licensing process, including the consumer protections, financial fees and vetting that come with that process.
However, unlike some of the federal court cases, the brief spends an extensive amount of time looking at how Kalshi presents its product and how the marketing and display of the site itself mimic the experience of a sportsbook. The suit takes note of leaderboards and other mechanisms where users can trumpet their success and encourages repeat trading on Kalshi, which raises problem gambling concerns by the state.
In addition to challenging the legality of the product, the AG’s office seeks an injunction to offline Kalshi’s sports contracts in the state while the case is being decided.
“Kalshi offers its users a fair, transparent, federally-regulated, and nationwide marketplace. Rather than engage in dialogue with Kalshi as many other states have done, Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas,” a Kalshi spokesperson told SBC Americas.
“Prediction markets are a critical innovation of the 21st century, and all Americans should be able to access them. We are proud to be the company that has pioneered this technology and stand ready to defend it once again in a court of law.”
Kalshi advertising under fire once again
This is the second course of legal action this month that calls Kalshi’s advertising approach into question, particularly the fact that the company repeatedly refers to its product as “betting”.
In the ongoing lawsuit filed by a consortium of California tribes against Robinhood and Kalshi alleging these companies are illegally offering sports betting in the state, the plaintiffs filed for an injunction to both force Kalshi’s offering off tribal lands in the state and put a moratorium on advertising the product as betting.
