The Public Health Advocacy Institute (PHAI) has filed a lawsuit in Massachusetts Superior Court against Kalshi, Robinhood and Susquehanna International Group for violating state gambling laws and offering unlicensed sports wagering to residents.
According to PHAI’s lawsuit, the Institute alleges Kalshi, Robinhood and Susquehanna offer a “prediction market structure” which acts as a “pretext designed to disguise" unlicensed sports betting as federally regulated "financial trading."
The same Massachusetts Superior Court had previously ruled the Commodity Exchange Act does not preempt state sports gambling laws, and that the Massachusetts Attorney General’s Office would “prevail” in claims made against Kalshi.
PHAI also alleged the entities “unjustly enriched themselves at the expense of thousands of Massachusetts consumers who lost substantial sums of money wagering on future events.”
In February 2026, a class action lawsuit filed in Massachusetts by PHAI against DraftKings moved to class certification, class-wide discovery and trial following a denial of the operator’s motion for summary judgement.
PHAI originally filed the lawsuit in 2023 on behalf of Massachusetts residents such as Melissa Scanlon and Sean Harris, alleging DraftKings failed to adequately disclose terms and conditions related to its $1,000 deposit bonus.
Despite the legal setbacks faced by operators such as Kalshi in state courts, the prediction markets entity was able to score a victory in Arizona after a federal judge approved a restraining order request from the Commodity Futures Trading Commission (CFTC) on April 13.
The temporary restraining order will be converted into a preliminary injunction after both parties submitted proposed language on April 23, vacating the need for a previously scheduled injunction hearing on May 6.
A Massachusetts Joint Committee unanimously passed Senate Bill 302 on March 10, which looks to impose a 51% tax on GGR produced by retail and online sports betting operators
