Massachusetts Supreme Court Ruling on Kalshi Now Imminent — First State High Court Decision on Prediction Markets
The Massachusetts Supreme Judicial Court is expected to rule within weeks on whether Kalshi's sports event contracts constitute illegal sports gambling under state law — the first time any US state supreme court has decided this question. The SJC appeared skeptical of Kalshi's CFTC-preemption argument at May 5 oral arguments. A coalition of 38 state attorneys general backed Massachusetts; the CFTC backed Kalshi. The outcome will be the first state apex court ruling on prediction markets anywhere in the country.
The Massachusetts Supreme Judicial Court — the state's highest court — is expected to rule within weeks on Commonwealth v. KalshiEx LLC (SJC-13906), a case that will produce the first state supreme court decision on prediction markets anywhere in the US. Massachusetts AG Andrea Campbell sued Kalshi in September 2025 (the first state to do so), alleging that sports outcome contracts constitute unlicensed sports wagering. The Superior Court granted a preliminary injunction blocking Kalshi's sports contracts on January 20, 2026. Kalshi appealed directly to the SJC, which took direct review — a step reserved for questions of substantial public importance — and heard oral arguments on May 5, 2026. The court appeared skeptical of Kalshi's core argument that CFTC registration as a designated contract market preempts state gambling enforcement.
For UK readers, the SJC is the Massachusetts equivalent of the Supreme Court of the United Kingdom — the apex court for Massachusetts state law. The SJC's ruling on whether CFTC registration preempts state gambling enforcement will be the first time any US state's highest court has addressed the prediction market question. That matters procedurally: state supreme court decisions are not binding on federal courts, but they create clear precedent within the state, are persuasive authority for other state supreme courts, and can be cited in SCOTUS certiorari petitions as evidence of a multi-forum legal conflict requiring federal resolution. A Gambling Commission equivalent in the UK would already have clear regulatory authority; in the US, the question of whether the commodities regulator or the state gambling regulators have jurisdiction is genuinely unsettled — and Massachusetts may be the first state apex court to answer it.
The amicus positioning at the SJC reflects the breadth of the national conflict. The CFTC filed an amicus brief on April 24 arguing exclusive federal jurisdiction. A coalition of 38 state attorneys general filed an opposing brief on April 28, arguing that CFTC registration does not displace state gambling authority. The 38-state coalition filing against a federal agency position is politically significant: it means that most US states have now taken a formal legal position that CFTC-licensed prediction market operators are subject to state gambling regulation. Combined with the 27-state coalition supporting California tribes in the Ninth Circuit, a clear majority of US states have signed formal legal briefs in the prediction market litigation in 2026.
The SJC's decision timing is significant given the surrounding legal calendar. New Jersey files its SCOTUS certiorari petition on September 3, citing the Third Circuit / Ninth Circuit split. The NFL regular season opens September 4, generating billions in prediction market sports volume. The Ninth Circuit's August 28 ruling provides the SJC with authoritative federal appellate support for the state's position — the SJC can cite a unanimous Ninth Circuit panel as evidence that the federal court system has not uniformly accepted Kalshi's preemption argument. If the SJC rules against Kalshi, it adds a state supreme court to the list of courts that have rejected CFTC-preemption claims. If it rules for Kalshi, it creates an unusual pro-platform ruling at the state apex level while every federal district court except the Third Circuit has ruled the other way. Either outcome sharpens the case for SCOTUS review.
Operators mentioned in this article
Recent updates
27 States Back California Tribes Suing Kalshi Over Sports Contracts Under Indian Gaming Law
Three California tribes are pursuing a separate Ninth Circuit case against Kalshi's sports contracts under the Indian Gaming Regulatory Act — a 1988 federal law governing tribal gaming rights that is independent of the CEA preemption arguments in the Nevada, NJ, and Connecticut cases. The Ninth Circuit refused consolidation with the Nevada case. A panel appeared skeptical of Kalshi in July. 27 states plus DC filed amicus supporting the tribes.
SCOTUS Review of Prediction Markets Hits 64% on Polymarket — New Jersey Files Cert Petition September 3
Polymarket's contract on Supreme Court review of prediction markets by year-end jumped from 30% to 64% within hours of the Ninth Circuit's August 28 ruling, generating $976K in volume. New Jersey files its certiorari petition September 3. The Third Circuit vs Ninth Circuit split on the same statutory question is the clearest available trigger for SCOTUS to take the case.
Ninth Circuit Rules 3-0: Kalshi's Sports Contracts Are Not Swaps — States Can Regulate Them as Gambling
A unanimous Ninth Circuit panel has ruled Kalshi's sports event contracts are not 'swaps' under federal law and that states can regulate them as gambling — directly contradicting the Third Circuit's April ruling in Kalshi's favour. The decision covers nine western states including California. New Jersey is preparing a Supreme Court petition. The NFL regular season opens September 4.