Polymarket Sues Massachusetts Over Prediction Market Regulation
- Polymarket sues Massachusetts over prediction market regulation.
- Dispute centers on federal versus state oversight authority.
- Case could impact prediction markets nationwide.
Polymarket has filed a federal lawsuit against Massachusetts officials on February 9, 2026, challenging state gambling laws, asserting federal CFTC authority should override state regulations.
The lawsuit could redefine the jurisdictional boundaries between federal and state control over prediction markets, potentially impacting market operations and regulatory frameworks across the United States.
Polymarket, operating as QCX LLC, has filed a lawsuit in federal court against Massachusetts Attorney General Andrea Joy Campbell and state gaming regulators. The court case, numbered 1:26-cv-10651, challenges the enforcement of state gambling laws on prediction markets.
The defendants include the Massachusetts Gaming Commission. Polymarket argues that these markets fall under the jurisdiction of the CFTC. Neal Kumar, Chief Legal Officer, expressed that the states are missing opportunities in market innovation.
The lawsuit highlights potential impacts on financial aspects such as liquidity and market fragmentation. It suggests that state enforcement could harm commercial relations and trust. The complaint argues for clarity on which authority governs these new market territories.
The legal battle raises questions about the balance of power between federal and state authorities, particularly regarding jurisdiction over prediction markets. The outcome could set a precedent influencing nationwide regulatory approaches in the cryptocurrency sector.
The Massachusetts Superior Court previously denied Kalshi a stay of a preliminary injunction, which may influence this case’s outcome. This ongoing legal discourse underscores challenges faced by nationwide prediction markets in aligning with state regulations.
The situation underlines a wider conflict in the regulatory landscape. Predictions markets like Polymarket face increased scrutiny as jurisdictions contend over who regulates event contracts. Federal oversight may offer uniformity; however, states assert control in gambling matters.
Neal Kumar, Chief Legal Officer, Polymarket, stated, “gaming regulators’ racing to state court to try to shut down Polymarket US and other prediction markets doesn’t change federal law,” adding that Massachusetts and Nevada will “miss an amazing opportunity to help build markets for tomorrow.”
