Polymarket counter-sues Massachusetts in federal court

Polymarket has asked a federal court to prevent Massachusetts from applying state gambling restrictions to its sports prediction contracts, escalating a dispute over which regulator has authority over the products. The company filed Monday in the U.S. District Court for the District of Massachusetts against Attorney General Andrea Campbell and state gaming officials, according to GambleRSS, citing Bloomberg Law.

A dispute over regulatory authority

Polymarket’s complaint argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over prediction markets. On that reading, Massachusetts cannot use its gambling laws to restrict or prohibit the platform’s contracts.

The company maintains that sports contracts are federally regulated financial instruments, notwithstanding their resemblance to wagers. It argues that Congress left decisions about their permissibility to the CFTC and that, because the regulator has not prohibited them, they should be available nationwide. Polymarket is seeking a declaration that state gambling laws do not apply to its operations, alongside an order preventing enforcement.

Recent decisions against rival Kalshi make the threat of enforcement concrete, Polymarket argues. According to GambleRSS, the company says state intervention could disrupt its business, divide a national market along state boundaries and force it to surrender rights it believes federal law protects. Its top lawyer has also described the suit publicly as an effort to protect users and preserve prediction markets, warning that state restrictions could impede innovation.

Kalshi’s setback frames the case

The previous week, a Massachusetts state judge rejected Kalshi’s request to pause an earlier ruling requiring it to block Massachusetts users during its appeal. The court found that Kalshi’s sports contracts fell under state gambling laws and required a license; federal oversight did not, in its view, remove that obligation. GambleRSS also reported that a Nevada ruling declined to protect Coinbase from state enforcement involving comparable products.

Massachusetts courts have emphasized states’ longstanding authority over gambling, consumer protection and licensing, rejecting expansive arguments that federal law displaces those powers. Polymarket’s lawsuit puts the competing position before a federal court: that allowing individual states to govern CFTC-supervised markets undermines nationally consistent exchanges.

What it means for prediction markets

• Access remains a central issue. Kalshi’s obligation to block Massachusetts users shows how jurisdictional disputes can translate into geographic restrictions.
• Federal oversight is contested protection. Polymarket’s claim of exclusive CFTC authority is a legal argument, not an established outcome of this case.
• The requested relief targets enforcement. A decision on whether Massachusetts can apply its gambling laws to Polymarket would bear directly on the platform’s ability to offer its contracts in the state.