Struggling MA gambler files lawsuit against Kalshi, claims he lost thousands

A struggling gambler from Raynham, Massachusetts, has filed a lawsuit against prediction market platform Kalshi, alleging that he lost tens of thousands of dollars on the platform’s sports betting event contracts.

The losses were incurred within a single month, and the man was struggling with a gambling disorder, which he alleges was facilitated by the billion-dollar company. The plaintiff, one Nicholas Smith, said that he had signed for self-exclusion programs to bar himself from gambling, but he was not excluded from Kalshi. Because of this, once Kalshi launched its sports event contracts in January 2025, Smith was once again drawn to his old habits. One prominent CEO did not hesitate to call prediction markets a form of financial exploitation, recently. Smith filed the lawsuit on April 22 in Suffolk County Superior Court and is seeking repayment of his losses and the losses of other plaintiffs who may join the case. The lawsuit relies on the Statute of Anne to argue its case, and could possibly help argue the plaintiff's case and help them recover their lost money. The statute was introduced in 1710, and it simply argues that any illegal gambling operator could be sued by the punters to recover their losses.

Kalshi, however, is far from an illegal company. At best, it’s a grey area, but even this term could be a stretch, as the prediction market platform is currently regulated by the Commodity Futures Trading Commission (CFTC), and the company itself maintains that its products do not constitute gambling. The CFTC has even filed lawsuits against individual states, arguing that they have tried to subordinate federal laws to local gaming statutes' interpretation. Not all jurisdictions have been as welcoming of prediction markets as the United States, however. Brazil has gone on a banning spree, seeking to limit the overlap between what the government sees as gambling and financial instruments.