Massachusetts Sports Betting Handle Falls 4% in May as Operators Point at Kalshi

Massachusetts has become the latest high-volume US sports betting state to report a shrinking handle, and the industry's loudest trade group is pinning part of the blame on prediction markets like Kalshi. The Massachusetts Gaming Commission (MGC) reported on Monday, June 22, that the commonwealth's seven online sportsbooks and three retail betting facilities took $632.1 million in wagers in May 2026. That is a decline of nearly 4% from May 2025 and a 7% drop from April, even though April had one fewer day. Gross sports betting revenue for the month came to $70.6 million, with online licensees accounting for almost $625 million of the total action.

The decline is not a one-month blip. Through the first five months of 2026, Massachusetts bettors staked about $3.45 billion, a 1.35% slip from the nearly $3.5 billion wagered over the same stretch in 2025. The state opened the year with a record January, then saw year-over-year handle cool in February, March, April, and May. Bally Bet, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, and theScore Bet are the seven online books licensed in the state. The three casinos, Encore Boston Harbor, MGM Springfield, and Plainridge Park, run the retail counters and combined to win $105.9 million from slots and tables in May.

A pattern across the biggest betting states

Massachusetts fits a trend visible in the markets that matter most to operators. The data below comes from state regulators and Casino.org's tally, and it shows handle softening across the East Coast through May 2026.

Here is the wrinkle that complicates the prediction-market story: sportsbook revenue is rising even as handle falls. Gaming analysts attribute that to two things. Missouri joined the legal market this year, adding fresh volume to national totals, and bettors keep loading up on parlays, which combine two or more wagers into one longer-odds position. That bettor preference has pushed operator hold from about 9% to north of 11%. Books are keeping more of every dollar wagered, so a handle dip does not automatically translate into a revenue dip. That nuance matters for affiliates pricing revenue-share deals, because a flat or growing net-gaming-revenue line can mask a real erosion in betting activity at the top of the funnel.

Why operators are pointing at Kalshi

People in all 50 states can now place what functions as a sports bet through federally regulated prediction markets such as Kalshi and Polymarket. These platforms treat the positions as event contracts, akin to buying and selling commodity futures, which places them under Commodity Futures Trading Commission oversight rather than state gaming law. They pay no state gaming taxes and answer to no state or tribal licensing regime, which lets them offer sharper pricing on sports outcomes than a taxed sportsbook can match.

The scale is the part operators cannot ignore. Kalshi processed roughly $9.1 billion in trading volume in January 2026, with about 91% of it tied to sports event contracts, and the platform crossed $100 billion in cumulative volume in June as 2026 World Cup trading surged, posting a record week of $6.38 billion. For comparison, all of Massachusetts handled $632.1 million across an entire month. The American Gaming Association argues this volume is coming straight out of the regulated market. AGA President and CEO Bill Miller said on CNBC in late May 2026 that states have lost more than $1 billion in gaming tax revenue since prediction markets began offering sports event contracts in late 2025. The group's written position is blunt: "Prediction market platforms are offering illegal sports betting nationwide outside the state and tribal regulatory frameworks that protect consumers. They override voter decisions, bypass key consumer protections, ignore state and tribal laws, and avoid licensing and taxes."

The causal claim deserves a hedge. The slowdown in Massachusetts and its neighbors arrives during a period of normal seasonal softness and after a record January, so prediction markets are one suspect among several. Kalshi and its backers reject the framing entirely, holding that event contracts are financial instruments, not wagers, and that taxing them as gambling would exceed state authority. The legal question is unsettled and moving in different directions: a Michigan judge ruled in June 2026 that sports prediction markets fall outside CFTC authority, even as the CFTC has sued states it accuses of overreach. State attorneys general, including Kentucky's, have taken Kalshi and Polymarket to court, and the dispute is widely expected to reach higher courts.

For the industry, the read is concrete rather than rhetorical. If handle keeps sliding in the four states above while an untaxed competitor clears tens of billions a month, the gap is a tax-base problem for legislatures and a customer-acquisition problem for licensed books and the affiliates who feed them. Massachusetts' May numbers are the latest data point, not the verdict.