Polymarket sues Massachusetts AG over crackdown

Polymarket has sued Massachusetts Attorney General Andrea Joy Campbell and other state officials in federal court in Massachusetts, seeking to prevent enforcement of state gambling laws against its operations, according to Casino.org reporting republished by GambleRss. The case adds to a series of disputes over who has authority to regulate prediction markets in the U.S.

A dispute over regulatory authority

Polymarket contends that Congress assigned exclusive oversight of event contracts to the Commodity Futures Trading Commission (CFTC), leaving states without authority to apply their gambling laws to those markets. State officials take the opposing view: prediction-market contracts constitute sports gambling offered without the licences required under state law.

Chief Legal Officer Neal Kumar outlined the company’s position on X, arguing that federal courts must settle jurisdictional questions affecting markets that operate nationally. In its lawsuit, Polymarket argues that Massachusetts enforcement against federally regulated derivatives exchanges would violate limits imposed by Congress.

Kalshi’s restrictions frame the stakes

The lawsuit points to the injunction Massachusetts obtained against rival prediction-market operator Kalshi on Feb. 6 2026. A judge declined to postpone an order requiring Kalshi to cease offering sports-event contracts in Massachusetts within 30 days unless it obtained a Massachusetts gaming licence, according to the report.

Polymarket argues that it faces an immediate prospect of equivalent enforcement, including civil penalties, potential criminal liability and a shutdown of its Massachusetts operations. It also says an injunction could damage its business nationwide by dividing the market, reducing liquidity, disrupting federally authorised activity and weakening banking relationships, commercial ties and user confidence. These are the company’s claimed risks, not findings by the court.

Massachusetts is not the only state presenting a legal obstacle for Polymarket; the report also identifies Nevada. The Massachusetts case could help determine whether Polymarket, Kalshi and other prediction-market operators can provide sports-event contracts nationally or must navigate restrictions on access state by state.

What it means for prediction markets

• Jurisdiction is the central issue: Polymarket’s claim of exclusive CFTC authority conflicts directly with states’ use of gambling laws.
• Access remains contested: The Kalshi order illustrates how state enforcement can restrict sports-event contracts while broader legal disputes continue.
• Liquidity risks are part of the case: Polymarket says geographically fragmented markets would reduce liquidity and disrupt business relationships; the supplied reporting does not establish that those effects have occurred.
• A filing is not a ruling: Polymarket is seeking protection from future enforcement. The report describes no decision granting that relief.