Polymarket Sues Massachusetts AG in Federal Preemption Strike

Polymarket filed a lawsuit against Massachusetts Attorney General Andrea Joy Campbell in federal court today, launching a preemptive legal strike to stop the state from classifying its prediction markets as unlicensed sports betting. The complaint, filed in the U.S. District Court for the District of Massachusetts, argues that the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction over event contracts, overriding state-level gaming restrictions.

The filing comes just 72 hours after a Massachusetts Superior Court judge denied rival platform Kalshi’s request for an emergency stay, forcing it to geofence state residents within 30 days. Polymarket’s legal team, led by Chief Legal Officer Neal Kumar, argues that this precedent poses an “imminent and irreparable” threat to their operations.

“Congress gave the CFTC, not states, exclusive authority over event contracts. These are national markets with critical questions that must be resolved in federal court.” . Neal Kumar, Polymarket CLO

The "Inevitable" Crackdown

Polymarket’s suit is a direct response to the aggressive stance taken by Massachusetts regulators. On Feb. 6, Judge Christopher Barry-Smith ruled that Kalshi’s CFTC-sanctioned contracts functionally operated as sports wagers under state law, dismissing the federal preemption argument. By filing for declaratory relief today, Polymarket attempts to move the battlefield from state courts, where gaming commissions hold home-field advantage, to a federal venue.

The core of the complaint relies on the Commodity Exchange Act (CEA). Polymarket asserts that its markets are derivatives, not bets, and therefore fall under the federal “occupy the field” doctrine. If the court agrees, it would effectively neutralize state AGs attempting to encircle the industry with patchwork gambling laws.

Institutional Context: The QCEX Factor

This legal offensive is only possible because of Polymarket’s strategic pivot in late 2025. The platform acquired QCEX, a CFTC-licensed exchange and clearinghouse, for $112 million, formally re-entering the U.S. market as a regulated entity. Unlike offshore crypto casinos, Polymarket now claims the same federal status as the CME Group or ICE, making the state-level ban a direct challenge to federal supremacy.

If the Massachusetts district court denies Polymarket’s injunction request, the platform could face the same fate as Kalshi: a forced exit from a key U.S. jurisdiction and a roadmap for other hostile states like Nevada and Maryland to follow suit.