Massachusetts Gaming Commission (MGC) has issued a strong warning to licensed sportsbooks in the state, prohibiting them from offering sports-related event contracts or entering into partnerships with prediction market platforms. This action comes after growing concerns about the legality of prediction markets, particularly the offering of sports event contracts—which allow players to buy and sell contracts based on sports outcomes, rather than betting on odds in the traditional manner.
Prohibition of Sports Event Contracts
On November 13, 2025, the MGC released a formal letter addressing all sports wagering operators in Massachusetts, clearly stating that offering sports-related event contracts in the state, either directly or through affiliates, is prohibited. The notice emphasized that FanDuel and DraftKings—both major sportsbook operators—had announced plans to launch prediction market products, allowing sports event trading. However, Massachusetts’ regulatory framework does not allow sportsbooks to offer these products under current laws.
The MGC letter outlines that sports wagering in Massachusetts is strictly governed by M.G.L. c. 23N, which defines authorized events and platforms for sports betting. It specifically prohibits any sportsbook offering contracts on sports events not authorized by the Commission or any associated prediction market contracts.
In a strict warning, the MGC stated: “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 Growing Popularity of Prediction Markets
Prediction platforms, such as Kalshi, have gained popularity across the U.S. by offering markets where users can trade outcomes of sports events. For instance, instead of betting on odds like the Kansas City Chiefs to win against the Buffalo Bills, players can purchase contracts associated with that outcome, allowing for a different style of betting. However, these markets are not regulated by state gaming commissions but are instead overseen by the Commodity Futures Trading Commission (CFTC) at the federal level.
This difference in regulatory frameworks has caused friction between state regulators and prediction market platforms, which operate across states that either have legal sports betting or not. Several states, including Massachusetts, have expressed concerns that these prediction markets may be operating illegally as unlicensed gambling.
Risk of License Revocation
The MGC made it clear that any sportsbook operator offering sports event contracts or directing players to such contracts in Massachusetts would face serious consequences, including the revocation of their license. The Commission has also noted that any action taken against these operators by other states or regulators could influence future decisions regarding their suitability to operate within Massachusetts.
The letter from the MGC also indicated that this action might not be the last, stating that the notice does not waive any rights regarding future determinations or regulation of prediction markets in the state.
Regulatory Pressure from Other States
The MGC’s warning adds to a growing list of state regulators who have taken similar actions against prediction market platforms. At least eight states, including Arizona, Illinois, Michigan, Nevada, and Ohio, have already sent cease-and-desist letters to Kalshi, arguing that these markets constitute unlicensed gambling.
In Nevada, FanDuel recently surrendered its sportsbook licenses, while DraftKings withdrew several sports betting applications, highlighting the increasing regulatory pressure on sportsbooks entering the prediction market space.
Future of Prediction Markets in Massachusetts
While the MGC has expressed its opposition to sportsbooks partnering with prediction market platforms, it has left the door open for future regulation. The letter made it clear that this warning does not rule out the possibility of prediction markets being authorized in the future, and the Commission may revisit the issue as it evolves.
Source:
Massachusetts Gaming Commission Letter on Prediction Markets, massgaming.com, November 13, 2025.
