Kalshi Gambling Addiction Risks, According to Massachusetts

Kalshi gambling addiction risks are many, according to the State of Massachusetts, a national public health leader. There are a growing number of stories of people saying they lost their savings on Kalshi.

On Sept. 12, 2025, the state announced a lawsuit against Kalshi, a popular gambling platform that facilitates bets on sports. Massachusetts said Kalshi’s sports betting product is illegal gambling under state law. The platform claims it offers sports “trading” under federal jurisdiction.

MA vs. Kalshi Lawsuit

Attorney General Andrea Joy Campbell filed the lawsuit in Suffolk Superior Court against KalshiEX LLC (otherwise known as Kalshi). The state said it wants Kalshi to stop offering online sports gambling to its residents.

“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” Campbell said in an announcement. “This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws.”

“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections,” said Massachusetts Gaming Commission Chair Jordan Maynard.

Let’s explore why Kalshi gambling addiction is a cause for concern, according to the state.

MA Says Kalshi Addiction in Gambling Design

Kalshi is slightly different from traditional online sportsbooks like Boston-based DraftKings.

Users of Kalshi can trade on sports “markets” in a binary bid/ask format. The gambling is mostly peer-to-peer, but Massachusetts said Kalshi will also act as a house-banked sportsbook when necessary to fill a gambler’s bet.

The company, which has Donald Trump Jr. as an advisor, allows sports betting in the form of moneyline, spread, prop, and over-under contracts.

Kalshi’s product “closely resembles sports wagers” on traditional betting apps, the suit said.

The platform allows users 18+. The legal age for betting in Massachusetts is 21. 

According to Massachusetts, Kalshi has addiction risks in four core areas:

• Color scheme can create a false sense of security
• Trending bets can build a fear of missing out
• Leaderboards can create a sense of competition to gamble
• User profiles can create an overestimate of skill in gambling

Let’s examine each of these alleged Kalshi gambling addiction features.

Kalshi Green Coloring 

The lawsuit said that Kalshi presents potential pays in bright green font, “a color that signals safety and correctness, to emphasize the attention to the profits.” 

In contrast, the state said, cost and odds appear in black, diminishing their visual prominence.

Kalshi presents bets and payouts using a suggested $100 stake, according to the lawsuit.

“This interface design subtly encourages high-risk transactions by emphasizing reward while obscuring risk,” said the Massachusetts lawsuit against Kalshi.

Kalshi Trending Bets

The complaint said that Kalshi offers a “continuously updating ticker tape of market activity” and a “people are also buying” feature on its gambling market pages.

Additionally, the platform has a “people also bought” prompt immediately after users bet. 

These features are optimized for “sustaining real-time stimulation and encouraging further speculation without pause,” the court filing alleged. 

According to the Kalshi gambling addiction lawsuit, the “trending bets” feature exploits “psychological triggers of gambling behavior” and is “engineered to increase user retention and transaction volume.”

“This uninterrupted sequence of feedback and engagement contributes to a reward loop commonly associated with addictive gambling behavior,” the lawsuit said. 

The state compared Kalshi to a slot machine designed to “bypass rational evaluation.” The near-miss effect is a known feature of slot machines and sports betting.

Kalshi Gambling Leaderboards

Kalshi uses public leaderboards to rank its bettors, based on profits and volume on a daily, weekly, monthly, and all-time basis. 

The leaderboards encourage competition and social comparison for those who opt in.

According to the complaint, the leaderboard rankings “mimic leaderboards utilized in video games” and “encourage users to chase short-term gains.”

The state also noted a countdown clock that reflects the time left for certain leaderboards.

“These features only serve to instill further incentive and pressure for users to appear on the leaderboard,” the suit said. “The leaderboards serve no market purpose; instead, they promote repeated high-risk behavior by rewarding speculative successes with community recognition.

Kalshi User Profiles

Regarding Kalshi gambling addiction, Massachusetts also had issues with user profiles.

“User profiles add another layer to Kalshi’s encouragement of engagement and speculation,” the lawsuit said. “Bettors may create a profile with a nickname, profile picture, and description to interact with other traders.”

These profiles can make online gambling seem more social than it really is, the state claimed.

The user profile interface “reinforces speculative behavior through design choices modeled on gambling platforms, including rapid trade cycling, reward anticipation, and mechanisms known to trigger compulsive engagement loops,” the lawsuit also alleged.

Is the Kalshi App Legit and Safe?

The prediction betting platform Kalshi is unsafe for use and poses a danger to consumers, according to allegations in a lawsuit filed by the State of Massachusetts.

The state said the company is an illegal sports betting platform, one that lacks safeguards that traditional online betting apps must deploy.

Furthermore, Kalshi is designed to be addictive, Massachusetts claimed.

The state alleged that Kalshi, which powers NFL sports betting on Robinhood, can cause gambling addiction and harm its users.

Reuters noted the company declined comment on the lawsuit. Broadly, the company maintains it is a CFTC-regulated exchange and disputes that state gambling law applies to its product.

The lawsuit isn’t the first time the state has butted heads with Kalshi. In 2025, the chair of the state’s gaming commission called out the company for its problem gambling philosophy.

In addition, a Kalshi NBA advertisement in Oklahoma raised eyebrows among addiction advocates because it lacked a helpline number.

Kalshi Gambling Addiction Overview

Despite state regulation, sports betting apps like DraftKings and FanDuel can be addictive and harmful. Any form of sports gambling can cause harm.

Sports betting addiction statistics show that over 50% of online bettors chase losses, and nearly 40% have felt ashamed after wagering.

As of publication, there is no independent research in the U.S. comparing addiction rates between traditional betting apps and so-called sports trading apps.

That said, there has been research to show that gambling products with strategy components can be more addictive than other forms of gambling, such as the lottery or even slots. Gambling games with some elements of skill can provide stronger intermittent reinforcement.

Prediction-style sports gambling is advertised as more skill-based than traditional betting apps. Time will tell what the possible harms might be for consumers.

Read more: Kalshi vs Polymarket