Michigan Judge Bars Kalshi Sports Bets, Threatens $500K Daily Fine

A Michigan judge has ordered Kalshi to stop offering sports wagers in the state and to pay $500,000 for every day it fails to geofence Michigan residents, under an order signed Tuesday.

Ingham County Circuit Judge Rosemarie Aquilina wrote that Michigan and its most vulnerable residents face immediate and irreparable harm from Kalshi’s “sports betting operation masquerading as an investment opportunity.”

Michigan requires bettors to be 21, the order notes, while Kalshi takes them at 18. Aquilina also found the exchange sidesteps the patron protections in Michigan’s regulatory framework, undercuts funding for schools, compulsive gambling prevention and first responders, and deprives Tribes of revenue while ignoring their sovereignty.

The injunction bars Kalshi from accepting deposits from anyone in Michigan, from advertising through apps, push notifications, influencers, affiliates or paid placements, and from allowing account creation or funding by state residents. Products “functionally similar” to sports betting are also caught, including parlays, moneyline, in-game and proposition bets.

What Kalshi has to do

Compliance runs through a third-party geolocation provider licensed by the Michigan Gaming Control Board and capable of meeting the board’s geofencing specifications. Within three business days, Kalshi must send the order to every futures commission merchant that offers its sports contracts, along with contact details for Michigan’s lawyers. It will not be held liable for what those firms do next.

Attorney General Dana Nessel sued in March under Michigan’s Lawful Sports Betting Act, arguing Kalshi lets residents bet on sports under the guise of trading event contracts. Kalshi moved the case to federal court and lost, returning it to Ingham County. A temporary restraining order followed in June, and both sides asked the judge to rule at an August 17 hearing. Kalshi’s defense team includes Neal Katyal, a former acting U.S. solicitor general.

Nessel said the order protects residents from what she called Kalshi’s “predatory, unlicensed practices.” Kalshi has fared worse in state courts than its federal regulator has: a Washington judge ordered it to drop most markets there in August, days after the Commodity Futures Trading Commission used emergency powers to keep it trading.

The CFTC has sued nine states over the same question, starting with Illinois, Arizona and Connecticut, then Wisconsin, then Minnesota within hours of its ban taking effect. President Donald Trump has called state officials who oppose prediction markets “SCUM.”

The Michigan order stands until a final judgment in the case.