A Michigan court has ordered prediction market platform Kalshi to stop offering sports-related event contracts to users in the state, marking another setback in the company’s growing legal battles with state regulators.
Ingham Circuit Court Judge Rosemarie E. Aquilina approved a temporary restraining order requested by Michigan Attorney General Dana Nessel, finding that Kalshi’s sports markets may violate Michigan gambling laws. The judge ruled that the company gains an unfair competitive advantage by operating outside the state’s licensing framework while regulated sportsbooks must comply with local rules and taxes.
The ruling also stated that Michigan residents, licensed betting operators and tribal gaming entities could be harmed by Kalshi’s activities. Nessel welcomed the decision, saying the state remains committed to maintaining a level playing field and preventing companies from avoiding gambling regulations by presenting sports wagering as prediction markets.
Kalshi has argued that its sports event contracts fall under the exclusive authority of the U.S. Commodity Futures Trading Commission (CFTC), which regulates federally approved prediction markets. The company maintains that individual states do not have the power to prohibit those markets and has challenged similar enforcement efforts across the country.
The temporary order follows a federal judge’s decision days earlier to reject Kalshi’s request to move the dispute into federal court. The restraining order will remain in place until at least July 13, when Michigan will seek a preliminary injunction that could extend the restrictions.
As part of the order, Kalshi must prevent Michigan residents from accessing sports contracts through a geolocation system operated by a third-party provider licensed by the Michigan Gaming Control Board. The court said it may also consider a licensed provider from another state if it satisfies Michigan’s geofencing standards.
Judge Aquilina also warned that Kalshi could face fines of $120,000 per day if it fails to meet the geolocation requirements. The figure was calculated using an estimate of the platform’s daily trading activity and projected revenue from Michigan-based trades.
Michigan becomes the latest state to restrict Kalshi’s sports markets, joining Nevada and Massachusetts in challenging the platform’s operations. While Massachusetts previously imposed a similar ban, enforcement there has been temporarily paused during Kalshi’s appeal.
Kalshi has vowed to fight the Michigan ruling, insisting its business is governed by federal law and accusing state authorities of protecting traditional gambling monopolies rather than consumers.