While the rest of Kalshi’s legal battles are taking place in federal court, the lawsuit between Massachusetts Attorney General Andrea Joy Campbell, the Massachusetts Gaming Commission (MGC) and the financial company is going to take place in a state court.
Judge says narrow scope of case belongs in state court
Judge Richard Stearns denied Kalshi’s attempt to move the suit, which Campbell filed against Kalshi in state court, to the federal level. Unlike other suits where Kalshi has filed seeking to quash a cease and desist from regulators, in this instance Massachusetts filed first and wants to litigate whether Kalshi’s sports contracts violate state laws regarding unregulated sports betting.
For Stearns, this narrow argument meant the state court was the appropriate venue.
“The complaint asserts a single claim against Kalshi: unlicensed sports wagering in violation of Mass. Gen. Laws ch. 23N, § 5. Kalshi does not contend that the federal Commodity Exchange Act (CEA) completely preempts the state’s traditional police power to regulate sports gambling within its borders. It argues only that the CEA precludes regulation of the specific subset of sports gambling that Kalshi offers — wagering on designated contract markets. This is a plain vanilla federal preemption defense, not a claim of complete preemption,” he noted.
The case now returns to the Suffolk County Superior Court where it was first filed.
Robinhood and MA federal suit still active
However, there is a second lawsuit involving the MGC that remains in federal court.
In the wake of the lawsuit, Robinhood turned around and sued the MGC in federal court. Filed last month, the suit is seeking an injunction to stop the MGC from attempting to regulate Kalshi’s sports contracts offerings. Robinhood hosts Kalshi sports contracts on its app and argued that its business would be jeopardized if Kalshi is offlined from offering these swaps in the state.
A group of tribal organizations recently filed an amicus brief in that case over the objections of Robinhood.
Other states where Kalshi has an active court case at the federal level are:
- California
- Maryland
- Nevada
- New Jersey
- New York
- Ohio
- Wisconsin
