Catenaa, Sunday, February 15, 2026-Polymarket filed a federal lawsuit Monday against Massachusetts, challenging the state’s efforts to regulate its event-based prediction markets.
The company argues that Congress granted exclusive oversight of such contracts to the U.S. Commodity Futures Trading Commission, not individual states.
Polymarket contends that prediction markets operate as federally regulated derivatives, placing them outside the reach of state gambling laws.
The lawsuit follows recent rulings against rival platform Kalshi, which was ordered to halt sports-event contracts for Massachusetts residents without a state gaming license. Kalshi’s appeal was denied, requiring compliance within 30 days.
Massachusetts is among several states, including Nevada, attempting to regulate sports-linked contracts, while courts have delivered mixed outcomes elsewhere.
In Tennessee, a federal judge temporarily blocked enforcement of a cease-and-desist order against Kalshi while considering federal preemption of state rules.
Polymarket’s legal action highlights ongoing friction between state regulators and prediction market operators over jurisdiction.
Federal policy shifts also provide context: the Commodity Futures Trading Commission recently withdrew a Biden-era proposal banning certain political event contracts and rescinded guidance on sports-linked offerings, signaling a more industry-friendly approach.
The case is expected to clarify whether states can impose licensing and operational restrictions on prediction markets or whether federal law supersedes state gaming regulations.
Polymarket maintains that uniform federal oversight is necessary for these national markets and that state-level interventions risk creating conflicting rules for platforms operating across multiple jurisdictions
