BEARISH 📉 : Polymarket Sues Massachusetts Over Sports Prediction Ban

Polymarket Files Lawsuit Against Massachusetts Regulators

Polymarket has filed a federal lawsuit against Massachusetts to block state-imposed restrictions on its operations.
The legal action coincides with Massachusetts' move to ban Kalshi from offering sports prediction markets, highlighting a conflict between state gambling laws and federal oversight.
During Super Bowl LX, prediction markets handled around $1.5 billion, approaching the $1.76 billion of traditional sportsbooks, with Kalshi alone handling over $500 million.
A Massachusetts court order demands Kalshi geofence state residents from sports-related markets within 30 days, viewing these platforms as unlicensed sports betting operations.
Polymarket argues that state intervention oversteps federal authority, citing Congress's grant of exclusive authority to the CFTC over event contracts.

Trading Volume During Super Bowl

Federal vs State Regulation

Polymarket claims Massachusetts lacks constitutional authority to regulate its platform, emphasizing the CFTC's jurisdiction over event contracts.
The lawsuit seeks to prevent enforcement actions that would require Polymarket to block local users.
Massachusetts Attorney General Andrea Campbell and state gaming regulators are defendants in the suit.

Implications for Decentralized Markets

The outcome could set a precedent for prediction markets across the U.S., impacting other states like Nevada, which recently introduced similar bans.
A federal victory for Polymarket may reinforce the CFTC’s role as the primary regulator, benefiting decentralized exchanges such as Hyperliquid.
Market analysts are anticipating a potential framework announcement from the CFTC following support for event contracts from Chairman Michael Selig.