Massachusetts Targets Sports Event Trading in New Warning

The Massachusetts Gaming Commission (MGC) has issued a formal warning to sportsbook operators, cautioning licensees against offering or promoting sports-related event contracts—an increasingly contested product in the fast-growing prediction markets industry. The notice, delivered Thursday, places Massachusetts alongside a growing number of states taking regulatory action against companies advancing sports event trading as a new frontier beyond traditional sports wagering.

The advisory comes as multiple major operators, including FanDuel and DraftKings, have explored or announced prediction-style trading products aimed at capturing users in large, non-betting states such as California and Texas. According to the MGC, several licensed sportsbooks in Massachusetts “are considering or have begun the process of partnering with entities in the prediction market space,” prompting the commission’s pre-emptive move.

A Clear Warning to Licensees

The MGC’s letter explicitly prohibits sportsbooks from offering sports event contracts in Massachusetts, whether directly or through affiliates. It further warns operators not to direct Massachusetts customers to such markets hosted elsewhere.

“In the event you offer sports-related event contracts in Massachusetts or direct patrons to such event contracts being offered in Massachusetts, the Commission may take steps up to and including revocation of your license,” the regulator stated.

While the notice is specific to in-state activity, the commission signaled that enforcement actions taken by regulators elsewhere may also affect an operator’s suitability in Massachusetts. That warning carries new weight after this week’s developments in Nevada, where FanDuel surrendered its sportsbook licenses and DraftKings withdrew its applications amid ongoing national scrutiny of event-trading products.

Part of a National Regulatory Escalation

Massachusetts’ action follows its earlier crackdown on prediction markets, including Attorney General Andrea Campbell’s September lawsuit against Kalshi, one of the country’s largest event-contract platforms. The suit aims to block Kalshi from offering sports-related markets in the state.

The state is far from alone. Regulators in Arizona, Illinois, Michigan, Nevada, and Ohio have issued similar warnings to licensed operators. Kalshi itself has received cease-and-desist letters from at least eight states asserting that prediction markets constitute unlicensed gambling. The company counters that it is lawfully regulated at the federal level by the Commodity Futures Trading Commission (CFTC), framing event contracts as financial instruments rather than wagers.

Litigation has expanded accordingly. Kalshi has filed lawsuits against New York, Maryland, Nevada, New Jersey, and Ohio seeking to block state enforcement actions. New Jersey’s case has drawn support from a coalition of 34 state attorneys general, demonstrating the scale of cross-state concern. Other major fintech and trading platforms, including Crypto.com and Robinhood, are also engaged in related legal disputes.

The regulatory pushback is not limited to state agencies. Multiple tribal nations have filed lawsuits against prediction-market operators, arguing that sports event trading offered on tribal lands violates the Indian Gaming Regulatory Act (IGRA). Those cases add a sovereign-rights dimension to the broader legal battle, raising questions about how event-based financial products intersect with tribal gaming compacts.

In the event you offer sports-related event contracts in Massachusetts… the Commission may take steps up to and including revocation of your license.

An Industry at a Regulatory Crossroads

Sports event trading sits at the intersection of regulated sports betting, financial derivatives, and emerging prediction platforms—an overlap that has prompted lawmakers, regulators, and operators to reassess the boundaries between gambling and financial speculation.

For now, Massachusetts’ warning adds to mounting pressure on operators seeking to expand into the space. As legal fights continue across the country, the industry is likely to face an extended period of regulatory uncertainty—with major implications for sportsbooks, financial-tech platforms, and consumers alike.