A Michigan court has ordered Kalshi to keep sports event contracts unavailable statewide under a preliminary injunction that carries fines of $500,000 per day. Ingham County Circuit Court Judge Rosemarie E. Aquilina signed the order on September 1.
The injunction prevents Kalshi from offering, listing, executing, or settling sports-related contracts for people located in Michigan. It covers moneyline markets, parlays, over-under contracts, in-game betting, and proposition bets.
Kalshi must use a third-party geolocation provider licensed by the Michigan Gaming Control Board. The provider must meet state geofencing requirements. The injunction will remain in place until the court enters a final order.
Michigan Attorney General Dana Nessel sued Kalshi in March with the Michigan Gaming Control Board. The complaint alleges Kalshi violated state sports betting law by offering sports event contracts without Michigan approval.
The state argues that Kalshi allows residents to engage in sports betting while presenting the transactions as event-contract trading. Kalshi argues that federal commodities law governs contracts traded on its federally registered exchange.
The case moved between state and federal courts after Kalshi tried to remove the lawsuit to federal court. A federal court returned the dispute to Ingham County Circuit Court. Can Kalshi comply with both state and federal directives when those requirements conflict?
Aquilina then issued a temporary restraining order in late June that blocked Kalshi’s Michigan sports contracts. This order carried potential fines of $120,000 per day and required compliance with state geolocation rules.
The new preliminary injunction replaces that temporary order. It also requires Kalshi to provide copies to futures commission merchants within three business days. The court limits Kalshi’s responsibility when customer location data remains with an intermediary and outside Kalshi’s control. This provision addresses contracts distributed through outside futures commission merchants.
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The Michigan case also created a direct conflict with federal derivatives oversight. After the state court imposed restrictions, the CFTC directed Kalshi to continue operating its federally regulated market. Kalshi had started unwinding sports event positions held by Michigan users to comply with the state order. The company told the CFTC that Michigan’s restrictions prevented further trading with state residents.
The dispute centers on jurisdiction. Kalshi says the Commodity Exchange Act gives the CFTC exclusive authority over event contracts on its exchange. Michigan says state gambling laws still apply to sports products offered locally. Other states continue similar legal fights. On August 28, Kalshi lost its Nevada appeal after the Ninth Circuit allowed Nevada to apply gaming laws to its sports contracts.
New Jersey has asked the US Supreme Court to review the issue. The Third Circuit had found that federal law prevented the state from regulating Kalshi’s sports event contracts. Connecticut officials sued Kalshi on August 26 and sought an injunction against sports contracts offered without a state wagering license. The CFTC later sued Connecticut and other states over similar restrictions.
Baltimore sued Kalshi and Polymarket in August over alleged unlicensed sports betting. Kentucky filed similar lawsuits in June, while disputes have also reached New York, Washington, Massachusetts, and other jurisdictions.