Polymarket Sues Massachusetts Over Prediction Market Crackdown

Coinbase and Robinhood may face compliance issues as state challenges federal oversight of event contracts.

Published on Feb. 11, 2026

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Polymarket, a prediction market platform, has sued the Massachusetts Attorney General in federal court over the state's actions against prediction market platforms. This comes after a state judge ordered rival platform Kalshi to cease sports wagering in Massachusetts within 30 days, rejecting Kalshi's argument that federal CFTC oversight shields it from state gambling laws. Polymarket claims the state is overstepping its authority, as Congress gave the CFTC exclusive oversight over event contracts. The outcome of this case could reshape the entire prediction market industry, with platforms facing either patchwork state-by-state licensing or the ability to operate freely nationwide under federal jurisdiction.

Why it matters

The prediction market industry is rapidly growing, with volumes expected to hit $3.1 billion for the 2026 Super Bowl, up 39% year-over-year. Major platforms like Polymarket and Kalshi have recently received multi-billion dollar valuations. However, the Massachusetts ruling against Kalshi threatens to disrupt operations, fragment markets, and erode user trust if other states follow suit. The outcome of Polymarket's lawsuit could have significant implications for the future of the prediction market industry.

The details

Polymarket sued Massachusetts Attorney General Andrea Joy Campbell in federal court on Monday, preempting the same fate that just hit rival Kalshi in January. A state judge ordered Kalshi to cease sports wagering in Massachusetts within 30 days, rejecting Kalshi's argument that federal CFTC oversight shields it from state gambling laws. This ruling could also impact Coinbase Global Inc (NASDAQ:COIN) and Robinhood Markets, Inc (NASDAQ:HOOD), which have integrated Kalshi into their trading apps. Polymarket claims the state is overstepping its authority, as Congress gave the CFTC, not states, exclusive authority over event contracts. The company purchased CFTC-licensed QCX in late 2025 to operate under federal oversight, but Massachusetts disagrees, suing Kalshi in September for operating without a sports betting license.

  • Polymarket sued Massachusetts Attorney General Andrea Joy Campbell in federal court on Monday, February 11, 2026.
  • In January 2026, a state judge ordered Kalshi to cease sports wagering in Massachusetts within 30 days.
  • Polymarket purchased CFTC-licensed QCX in late 2025 to operate under federal oversight.

The players

Polymarket

A prediction market platform that has sued the Massachusetts Attorney General in federal court over the state's actions against prediction market platforms.

Massachusetts Attorney General Andrea Joy Campbell

The Massachusetts Attorney General who is being sued by Polymarket in federal court over the state's actions against prediction market platforms.

Kalshi

A rival prediction market platform that was ordered by a state judge to cease sports wagering in Massachusetts within 30 days, after the judge rejected Kalshi's argument that federal CFTC oversight shields it from state gambling laws.

Coinbase Global Inc (NASDAQ:COIN)

A platform that integrated Kalshi into its trading app and may face compliance headaches due to the Massachusetts ruling against Kalshi.

Robinhood Markets, Inc (NASDAQ:HOOD)

A platform that integrated Kalshi into its trading app and may face compliance headaches due to the Massachusetts ruling against Kalshi.

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What they’re saying

“Congress gave the CFTC, not states, exclusive authority over event contracts.”

— Neal Kumar, Chief Legal Officer, Polymarket (Polymarket)

What’s next

The judge in the case will decide on whether to grant Polymarket's requested injunctions to block state enforcement against prediction market platforms.

The takeaway

The outcome of Polymarket's lawsuit against Massachusetts could have significant implications for the future of the prediction market industry, determining whether platforms face patchwork state-by-state licensing or can operate freely nationwide under federal jurisdiction.