Polymarket, a prediction market based on cryptocurrency, is set to challenge the state of Massachusetts in a legal battle.
Neal Kumar, the chief legal officer of Polymarket, announced that the company has initiated a federal lawsuit against the state, citing concerns about jurisdictional issues related to event contracts.
“Congress has granted exclusive authority over event contracts to the CFTC, not states. These are national markets with significant questions that need to be addressed in federal court.
Rushing to state court to attempt to shut down Polymarket US and other prediction markets does not change federal law. States like MA and NV, which have taken such actions, may miss out on the opportunity to contribute to the development of markets for the future.”
Last year, Massachusetts filed a complaint against Kalshi, one of Polymarket’s competitors, alleging that the company was violating the state’s sports wagering laws. Despite Kalshi’s efforts to dismiss the state’s preliminary injunction, a judge rejected the firm’s argument recently.
In its new lawsuit, Polymarket states that it “seeks to prevent imminent and irreparable harm caused by Massachusetts’s enforcement of state gambling laws against federally regulated derivatives exchanges—an enforcement that Congress has explicitly prohibited.”
Following a similar legal action in Nevada last week, where a state court ordered Polymarket to cease operations, the company has taken action in Massachusetts as well.
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