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The class-action complaint argues the prediction-market company ran unlicensed sports betting, bolstering the attorney general’s separate push to bar Kalshi in the state.
A phone displays crypto trades on Kalshi on Thursday, April 16, 2026. (AP Photo/Jenny Kane)
A Raynham man who says he struggles with gambling addiction lost tens of thousands of dollars on Kalshi’s sports-betting markets within a single month and is now suing the company in a class-action suit to get that money back.
Nicholas Smith, the plaintiff, typically signs up for voluntary self-exclusion programs to prevent himself from wagering. But neither Kalshi nor Robinhood, which hosts Kalshi’s prediction markets, offered that safeguard.
Without it, the lawsuit claims, he succumbed to his addiction soon after Kalshi expanded into sports wagering in January 2025, ahead of major sporting events such as the Super Bowl.
Smith filed the lawsuit in Suffolk County Superior Court on April 22, seeking repayment of the money he and others may have lost. The complaint did not specify how much Smith lost.
His case comes as Massachusetts Attorney General Andrea Campbell pursues her own legal fight against Kalshi.
Last year, Campbell sued the company, accusing it of operating illegal and unsafe sports-wagering operations by accepting bets from Massachusetts residents without a state license or compliance with the Massachusetts Gaming Commission’s rules.
On Jan. 20, the attorney general secured a preliminary injunction ordering Kalshi to stop taking online sports wagers and event-based contracts from Massachusetts customers until it meets state requirements.
“The Court has made clear that any company that wants to be in the sports gaming business in Massachusetts must play by our rules — no exceptions,” Campbell said at the time.
In February, the Massachusetts Appeals Court granted Kalshi’s request to delay the shutdown until after the appeal is decided.
How Kalshi operates:
Kalshi received regulatory approval, specifically for event contracts, from the federal Commodity Futures Trading Commission through the Designated Contract Market in 2020. The approval allows it to operate nationally. Users can trade in anything from economics, culture, and weather to financial markets.
Kalshi did not return a request for comment.
The Attorney General’s Office argues that Kalshi is effectively offering sports bets through its online exchange. On the platform, users wager by choosing “yes” or “no” on whether a specific outcome will happen, a setup the office says mirrors the sports wagers offered by licensed operators.
Prosecutors also say Kalshi is skirting key consumer protections. According to the complaint, the company allows users as young as 18 to place bets even though the legal age in Massachusetts is 21.
The office said it also provides few tools or education to help users manage financial risk, and fails to offer self-limiting protections such as maximum deposits or wager caps.
The class-action lawsuit echoes those claims.
“Kalshi’s framing of its offerings as derivatives is illusory,” the complaint said.
What’s next?
The class-action lawsuit is relying on the “Statute of Anne” to recover lost wages. Originating in 1710, the British law intends to protect gamblers from financial ruin by allowing them to sue to recover money lost in unlawful gambling.
Meanwhile, the state’s lawsuit against Kalshi is returning to the Supreme Judicial Court on Monday for oral arguments, putting the legality of the February injunction in question.
Kalshi appealed the Superior Court’s findings in March that it was likely running illegal gambling operations.
Beth Treffeisen is a general assignment reporter for Boston.com, focusing on local news, crime, and business in the New England region.
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