Key facts
- A Michigan judge has issued a preliminary injunction against Kalshi, barring it from offering sports wagers in the state.
- Kalshi faces a $500,000 daily fine if it fails to geofence Michigan residents.
- The order prohibits Kalshi from accepting deposits, advertising, or allowing account creation/funding by Michigan residents.
- The injunction applies to products functionally similar to sports betting.
- The ruling was issued by Ingham County Circuit Judge Rosemarie Aquilina.
A Michigan judge has ordered the event contract exchange Kalshi to cease offering sports wagers within the state, imposing a potential $500,000 daily fine for non-compliance. Ingham County Circuit Judge Rosemarie Aquilina signed the preliminary injunction on Tuesday, stating that Michigan and its residents face immediate and irreparable harm from Kalshi's operations, which she described as a "sports betting operation masquerading as an investment opportunity."
The order specifically bars Kalshi from accepting deposits from individuals in Michigan, advertising through various channels within the state, and allowing account creation or funding by Michigan residents. The injunction also extends to products deemed "functionally similar" to sports betting, encompassing wagers like parlays and in-game bets.
To comply, Kalshi must utilize a third-party geolocation provider licensed by the Michigan Gaming Control Board. The exchange also has three business days to notify every futures commission merchant offering its sports contracts about the order. The lawsuit was initiated in March by Michigan Attorney General Dana Nessel, who argued Kalshi was allowing residents to bet on sports under the guise of trading event contracts. Kalshi's defense team includes Neal Katyal, a former acting U.S. solicitor general.
Judge Aquilina noted that Michigan requires bettors to be 21, while Kalshi accepts users aged 18. She also found that Kalshi bypasses patron protections, diverts revenue intended for schools and compulsive gambling prevention, and disregards tribal sovereignty. The injunction remains in effect until a final judgment is reached in the case. The Commodity Futures Trading Commission has also taken action against prediction markets, suing nine states over similar issues.