A Michigan judge has issued a preliminary injunction blocking Kalshi from offering sports event contracts to people located in the state, escalating a growing legal fight over prediction markets and sports betting.
Ingham County Circuit Judge Rosemarie E. Aquilina signed the order Tuesday. It converts an earlier temporary restraining order into a preliminary injunction that will remain in place until the court reaches a final decision.
The ruling also raises the financial stakes for Kalshi. The company could face a $500,000 daily fine for failing to meet the court’s geolocation requirements.
Michigan Tightens Restrictions
The injunction prohibits Kalshi from offering, listing, executing, or settling sports contracts for Michigan users. It also covers products that function like conventional sports wagers.
The order specifically addresses several types of contracts, including:
- Moneyline and straight bets
- Parlays and teaser bets
- Over-under markets
- In-game wagers
- Proposition bets
- Exchange betting and pools
Kalshi must also stop advertising these products to people located in Michigan or using a Michigan address.
Furthermore, the court requires Kalshi to use a third-party geolocation provider licensed by the Michigan Gaming Control Board. The technology must comply with the state’s geofencing standards.
National Fight Over Prediction Markets
Michigan Attorney General Dana Nessel sued Kalshi in March, alleging that its sports contracts violate the state’s Lawful Sports Betting Act. The state argues that Kalshi is effectively offering unlicensed sports gambling while operating under the framework of federally regulated financial markets.
Kalshi has maintained that its event contracts fall under federal commodities regulation and the jurisdiction of the Commodity Futures Trading Commission.
The Michigan ruling arrives as Kalshi faces similar disputes across the country. Recent court decisions have produced conflicting views over whether federal law prevents states from regulating sports prediction contracts.
That split could eventually push the issue toward the U.S. Supreme Court. For now, Michigan residents remain barred from Kalshi’s sports markets, while the company faces a potentially significant financial penalty if it fails to comply.
