Massachusetts Court Delays Decision On Letting Kalshi Sports Contracts Ban Take Effect

A Massachusetts judge who was set to decide on whether to let an injunction banning Kalshi from the state come into effect instead kicked the can down the road Friday, seemingly ensuring that the prediction market will remain available in the Commonwealth until after the Super Bowl.

The hearing Friday followed a decision on Tuesday to grant an injunction that would have banned Kalshi from offering sports event contracts in the state. In the Friday hearing, Judge Christopher Barry-Smith was set to decide whether to grant Kalshi a stay to prevent enforcement of the injunction. 

If the injunction was not stayed, it was set to go into effect once the hearing ended. The injunction would require Kalshi to geofence Massachusetts within seven days of its entry into force.

However, instead, the decision on a stay, and the potential enforcement of the injunction, was pushed back, with the parties meeting again to provide an update late next week (the week of Jan. 26).

The exact date of the new meeting has not yet been set, but it appears that the decision on whether to enforce the stay may not be made until an even later date, as Massachusetts will have an opportunity to respond to Kalshi’s motion for a stay by Jan. 30, and Kalshi can then reply by Feb. 4.

“Hopefully a couple weeks from today, these issues will be ready for me to decide,” Barry-Smith said.

Given those timings, Kalshi looks set to remain active in Massachusetts until at least after the Super Bowl, which is set for Feb. 8, and could well include the New England Patriots, who play the Denver Broncos Sunday in the AFC Championship.

Kalshi and MA differ on injunction specifics

Part of the remaining difference between the two parties is the treatment of contracts that have already been bought by Massachusetts residents. The injunction proposed by Massachusetts would allow those contracts to remain active until they’re settled, but would not let customers cash out of them as the state argues that this would be a “subsequent transaction.” A further dispute concerns the practicality and cost of geofencing a state within seven days.

Kalshi also argues that the state’s proposed injunction is too broad, as it says Kalshi cannot offer any contracts that meet Massachusetts’ existing definition of “sports wagering,” which includes wagers on “other events” outside of sports. The prediction market says that it should clarify that the ban would only apply to contracts on sports but allow for other contracts.