A pivotal legal battle in Massachusetts is nearing a critical juncture, with a judge outlining a swift timeline for a prediction market to implement significant technological changes.
Judge Christopher K. Barry-Smith is considering a 30-day window for Kalshi, a prediction market operator, to establish geofencing – a digital boundary restricting access to its sports betting features within the state.
The case stems from allegations dating back to Fall 2025, when the Massachusetts Attorney General, Andrea Joy Campbell, asserted that Kalshi was unlawfully offering sports gambling without the necessary state license, even surpassing the revenue of licensed sportsbooks.
Kalshi’s legal strategy faced a setback when the case was moved to state court, stripping away a layer of federal protection previously shielding the company’s arguments.
The judge’s preliminary assessment reflects a balance of perspectives from previous rulings, offering Kalshi a path forward – albeit a tightly constrained one.
Crucially, the ruling allows Kalshi to continue operating without a Massachusetts gambling license, provided it effectively prevents residents from participating in sports event contracts through the implementation of geofencing technology.
Legal commentator Daniel Wallach emphasized the necessity of “technological controls” to ensure sports contracts aren’t offered “directly or indirectly” to individuals within Massachusetts, given Kalshi’s nationwide reach.
Judge Barry-Smith rejected Kalshi’s request for a 90-day compliance period, citing the company’s ample time to prepare, referencing prior regulatory warnings, including a notice from the CFTC in September 2025.
The system will also include visible flags alerting users when they attempt to place a prohibited sports-related contract, providing clear notification of restricted features.
A proposed preliminary injunction order is expected by February 4, 2026, with the judge indicating a simultaneous decision on Kalshi’s request to pause the injunction while an appeal is considered.
