Polymarket Sues Massachusetts Over CFTC Event Contract Authority
News
Polymarket has filed a federal lawsuit against the Commonwealth of Massachusetts, asserting that Congress vested the Commodity Futures Trading Commission (CFTC) with exclusive oversight of event contracts and that states cannot independently shut down CFTC‑regulated prediction markets.
Neal Kumar, Polymarket’s chief legal officer, confirmed the filing on Monday, stating that the issues concern nationwide markets and unresolved federal questions that should not be decided at the state level. He added that moves by states such as Massachusetts and Nevada to halt Polymarket US and other prediction venues do not alter federal law and risk foregoing an opportunity to develop future markets.
Source: Neal Kumar
According to Bloomberg Law, the complaint was submitted preemptively to prevent potential enforcement by Massachusetts Attorney General Andrea Campbell, which Polymarket contends would improperly disrupt federally regulated derivatives markets. The action follows a recent Massachusetts state court decision granting a preliminary injunction that bars Kalshi, another prediction market, from listing contracts tied to sports events within the state.
The filing also comes one week after a Nevada judge prohibited Polymarket from offering sports‑related contracts to users in Nevada, citing “irreparable” harm to the state’s ability to safeguard the integrity of its sports betting regulatory system.
An excerpt of Polymarket’s lawsuit filed in the United States District Court for the District of Massachusetts. Source: Pacer
State scrutiny intensifies as prediction market volumes climb
Massachusetts and Nevada are among a growing number of states examining or restricting prediction markets. Kalshi has said that at least eight additional states, including New York, Illinois and Ohio, have pursued measures to limit or challenge sports‑related contracts.
Despite the scrutiny, trading activity has accelerated. Dune data shows prediction markets processed $3.7 billion in volume during a single week in January, a record high.
Separate figures from Messari indicate Polymarket and Kalshi are closely matched in trading volume, even though they operate under different models—Polymarket uses decentralized infrastructure. As of October, the two had nearly identical volumes.
Both firms have raised substantial venture funding, with Polymarket valued at $9 billion and Kalshi at $11 billion following their latest rounds.
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