Polymarket sues Massachusetts over market regulation

Polymarket is suing Massachusetts, arguing that only federal regulators can oversee its prediction markets. The lawsuit challenges state authority and aims to block state gambling law enforcement.

Polymarket has filed a federal lawsuit against Massachusetts, challenging the state's authority to regulate its decentralized prediction market platform. The company argues that only the Commodity Futures Trading Commission (CFTC) should oversee event-based contracts, classifying them as federally regulated financial instruments rather than state-regulated gambling products. This legal action follows heightened scrutiny of prediction markets. Recent court decisions in Massachusetts and Nevada have temporarily banned sports-related prediction markets and forced platforms like Kalshi to restrict access for state residents. Polymarket claims that allowing states to enforce their own gambling laws would create inconsistent regulations, disrupt nationwide operations, and harm liquidity and business relationships. The lawsuit aims to prevent Massachusetts from imposing penalties and seeks clarity on whether prediction markets fall under federal or state oversight—a decision that could shape the future of blockchain-based financial platforms in the U.S.