Polymarket Seeks Federal Ruling to Block Massachusetts Enforcement

Polymarket’s chief legal officer, Neal Kumar, disclosed the action in a post on X, saying the company is seeking to block Massachusetts from enforcing state gambling laws against its platform. The lawsuit was filed in the U.S. District Court for the District of Massachusetts and names state officials as defendants.

“Today, we filed a lawsuit in federal court against Massachusetts. Congress gave the CFTC, not states, exclusive authority over event contracts,” Kumar wrote. “These are national markets with critical questions that must be resolved in federal court.”

Kumar added that state-level efforts to restrict prediction markets do not override federal law. “Racing to state court to try to shut down Polymarket US and other prediction markets doesn’t change federal law — and states like MA and NV that have done so will miss an amazing opportunity to help build markets for tomorrow,” he said.

Kumar added:

“As always, we continue to welcome dialogue with other states while the federal courts consider these important issues. We fight for the users.”

The dispute centers on whether event-based contracts offered by Polymarket fall exclusively under the jurisdiction of the U.S. Commodity Futures Trading Commission or can also be regulated by states as forms of gambling. Polymarket argues that the Commodity Exchange Act grants the CFTC sole authority over such markets.

Massachusetts regulators, like officials in Nevada, have taken the position that certain prediction contracts—particularly those tied to sports outcomes—constitute unlicensed sports wagering under state law. Those regulators say state oversight is necessary to enforce consumer protections and gambling restrictions.

The lawsuit follows recent court actions involving rival platform Kalshi. Earlier this month, a Massachusetts judge upheld an injunction requiring Kalshi to block state residents from accessing sports-related contracts, rejecting the company’s argument that federal law preempts state enforcement.

Polymarket’s complaint seeks a declaratory judgment affirming federal preemption and an injunction preventing Massachusetts from applying its gambling statutes to the platform. The company maintains that its markets are national in scope and cannot function under a patchwork of state-by-state rules.

Prediction markets allow users to buy and sell contracts based on the outcomes of real-world events, including elections, economic data, and sports. Operators argue these contracts function as financial derivatives, while state regulators say they closely resemble traditional betting products.

The legal clash reflects a broader national debate over how prediction markets should be regulated as they grow in popularity. States emphasize their long-standing authority over gambling, while market operators contend Congress intended uniform federal oversight.

Also read: Crypto.com Launches OG Prediction Markets App With CFTC‑Regulated Contracts

A ruling in Polymarket’s favor could strengthen federal control and limit state intervention across the U.S. A win for Massachusetts, however, could encourage additional states to impose restrictions or require geofencing, reshaping how prediction markets operate domestically.

The case adds to a growing list of federal and state court battles that may ultimately determine whether prediction markets are treated primarily as financial instruments or as a form of gambling subject to local control.

FAQ ❓

• Why is Polymarket suing Massachusetts?
  The company argues federal law gives exclusive authority over event contracts to the CFTC, not individual states.
• What is Massachusetts arguing?
  State officials say certain prediction market contracts amount to unlicensed sports gambling under state law.
• How does this affect users?
  The outcome could determine whether users face state-based access restrictions or nationwide availability.
• Are other states involved in similar disputes?
  Yes, regulators in states including Nevada have taken comparable actions against prediction market platforms.

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