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Polymarket isn’t waiting to see what happens next in Massachusetts. Just days after the state won a preliminary injunction against competitor Kalshi, the prediction market platform filed its own lawsuit in federal court, seeking to block state regulators from taking similar action against it. The message from Polymarket is clear: Massachusetts should not be regulating its sports event contracts in the first place.
Polymarket moves fast after Kalshi injunction
Last week, a Massachusetts judge declined to pause an injunction requiring Kalshi to stop offering sports-related event contracts in the state within 30 days. Regulators argued that those contracts function like unlicensed sports betting under state law. Polymarket clearly took note.
Rather than waiting to become the next target, the company sued Attorney General Andrea Joy Campbell and the Massachusetts Gaming Commission. In its filing, Polymarket said it faces a “real and imminent” risk of enforcement that could result in civil penalties, potential criminal exposure, and a forced shutdown in the state.
Company officials argue that even the threat of enforcement is enough to cause serious damage to their business.
Federal jurisdiction at the heart of lawsuit
At the heart of the dispute is a jurisdictional tug-of-war. Polymarket says Congress gave the Commodity Futures Trading Commission exclusive authority over event contracts through the Commodity Exchange Act. From the company’s perspective, these contracts are federally regulated derivatives traded on designated contract markets, not state-regulated wagers.
Neal Kumar, Polymarket’s chief legal officer, has publicly called these national markets “governed by federal law.” The lawsuit asks the court for both a preliminary and a permanent injunction preventing Massachusetts from enforcing its gaming laws against the platform.
State regulators see things differently. Massachusetts law allows wagering only on events specifically authorized by the Gaming Commission and offered through licensed operators. Officials have warned that entering the prediction contract space without approval could jeopardize licenses and violate state law.
Polymarket faces similar challenges in Nevada
Massachusetts is just one front in a broader legal battle. In Nevada, a state judge recently issued a temporary restraining order requiring Polymarket to halt operations while litigation proceeds. The court cited potential “immediate, irreparable” harm if the platform continued operating without state approval.
Crypto.com faced similar trouble in Nevada after a judge denied its request for a preliminary injunction. The company ultimately stopped offering sports contracts there. Those cases highlight growing tension between federally regulated exchanges and state gaming regulators.
State-by-state regulations vs. national markets
What happens in Massachusetts could ripple nationwide. If a federal court sides with Polymarket, state regulators may see their authority over sports-related event contracts significantly limited. If Massachusetts prevails, prediction markets could face state-by-state restrictions similar to those imposed on traditional sportsbooks.
That scenario could fragment markets, reduce liquidity, and complicate relationships with banks and commercial partners. For now, the fight is far from over. What started as a niche political trading platform has evolved into a high-stakes legal clash over who controls the future of sports event contracts in the United States.
