Michigan judge orders Kalshi to halt sports wagering across state

A Michigan judge has temporarily shut Kalshi’s sports contracts out of the state, handing Attorney General Dana Nessel a preliminary injunction while her lawsuit against the prediction-market company moves forward.

Ingham County Circuit Court Judge Rosemarie E. Aquilina signed the order September 1, barring Kalshi and related parties from activities tied to sports wagering in Michigan until the court issues a final order.

Aquilina found Michigan had satisfied the legal requirements for preliminary relief. The order said, “Michigan and its most vulnerable citizens are suffering and will continue to suffer immediate and irreparable harm absent relief from being exploited by Kalshi’s sports betting operation masquerading as an investment opportunity.”

“Kalshi long attempted to pass itself off as a legitimate gaming operation in our state, and I am relieved that this order further protects Michigan residents from its predatory, unlicensed practices,” said Attorney General Nessel in an accompanying statement. “My office will continue to defend Michiganders and enforce our gaming laws, which ensure gambling revenue is regulated and distributed back into our communities.”

Kalshi faces Michigan sports betting ban and steep noncompliance fines

Nessel brought the case in March, arguing Kalshi effectively runs an unlicensed sportsbook by letting Michigan customers trade event contracts tied to sports results without Michigan Gaming Control Board approval. Examples previously cited by the state covered hockey, golf and basketball, along with totals, spreads and other sports outcomes.

Kalshi tried moving the dispute into federal court, but the case was returned to Ingham County. The jurisdictional fight reflects a wider disagreement over prediction markets: Kalshi considers its contracts federally regulated financial products, while Michigan says sports contracts fall under state gambling laws.

The injunction blocks contracts functioning as internet sports betting, including parlays, moneylines, over-unders, pools, proposition bets and in-game wagers. Kalshi also cannot collect related deposits or fees or promote those products to Michigan residents.

Age rules were another concern for Aquilina. “Michigan’s legalized gaming industry requires those who wish to place wagers to be 21 years of age or older,” the order states. “Kalshi, however, allows people to place wagers beginning at age 18.”

The court also cited lost public revenue, stating that “Kalshi is undercutting Michigan’s funding for schools, compulsive gambling prevention, economic development, and first responders.” Detroit and tribal governments could also lose revenue, according to the order.

Kalshi must now use a third-party geolocation provider licensed by Michigan regulators and capable of meeting state geofencing standards. Noncompliance carries a steep potential penalty. The order says Kalshi “shall pay a fine of $500,000 per day for each day that the Court finds Kalshi did not comply with the geolocation requirements of this order.”

The company must also distribute the injunction to Futures Commission Merchants offering its sports event contracts within three business days.

The ruling follows a June temporary restraining order and another regulatory clash in July, when the Commodity Futures Trading Commission directed Kalshi to restore Michigan trades it had unwound following a state court order. Kalshi said that federal action left it caught between conflicting state and federal requirements.

Featured image: Canva / Kalshi

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