TLDR
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Michigan court orders Kalshi to stop sports betting access in the state
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Kalshi faces $120,000 daily fines if it violates geolocation rules
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Michigan AG says Kalshi operated without a required gaming license
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The order adds pressure on prediction markets offering sports contracts
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Kalshi argues its CFTC status gives it federal authority over contracts
Michigan regulators won a temporary court order against Kalshi on Monday, forcing the prediction market operator to stop sports betting access in the state. The order adds new pressure to the fast-growing event contracts sector. It also sharpens the dispute over federal trading rules and state gambling law.
Michigan Court Blocks Kalshi Sports Contracts
Ingham County Circuit Court Judge Rosemarie Aquilina issued the temporary restraining order after a request from Attorney General Dana Nessel. The order bars Kalshi from offering sports event contracts to users located in Michigan. It also requires stronger location controls before the company can continue any covered activity.
The judge ordered Kalshi to use a third-party geolocation provider licensed by Michigan’s gaming regulator. She also warned the company could face a $120,000 daily fine for noncompliance. The order applies while the state court case moves through its next stage.
Michigan now becomes the second state with a court-ordered block against Kalshi’s sports contracts. Nevada issued a similar temporary ban earlier this year. Meanwhile, a comparable injunction in Massachusetts remains paused during Kalshi’s appeal.
State Officials Challenge Prediction Market Model
Nessel sued KalshiEx LLC on March 3, 2026, and accused the company of violating Michigan’s Lawful Sports Betting Act. The state argues that Kalshi offers sports wagering without a required gaming license. It also says the platform exposes residents to unregulated betting activity.
Kalshi has pushed back by citing its federal status as a CFTC-registered Designated Contract Market. The company argues that federal commodities law controls its event contracts. However, Michigan says that status does not override state gambling restrictions.
A federal judge recently sent the dispute back to state court after Kalshi sought removal. Judge Paul L. Maloney ruled on June 26, 2026, that Kalshi had not established federal jurisdiction. As a result, Michigan courts will handle the case for now.
Broader Fight Over Sports Event Contracts
The case fits into a wider fight over prediction markets and sports-related event contracts. States say platforms must follow gambling laws when users stake money on game outcomes. Kalshi and similar firms argue that CFTC oversight gives them federal authority.
Other platforms also face pressure as states test the limits of prediction market regulation. Kentucky sued several operators in June, including Kalshi and Polymarket. Massachusetts and Nevada have also taken action against sports-focused event contracts.
The outcome in Michigan could influence how other states approach the sector. If courts require state licenses, operators may face separate rules across many jurisdictions. For Kalshi, the order marks a clear setback, but the broader legal fight remains unresolved.
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