Key facts
- The CFTC has blocked Kalshi from canceling trades for Michigan customers.
- A Michigan court had previously ordered Kalshi to cease sports wagering in the state.
- The CFTC stated the state court's order interfered with federal law.
- CFTC Chair Michael Selig asserted that states cannot compel registered entities to violate federal regulations.
- Canceling executed trades risks undermining market certainty and public confidence.
The U.S. Commodity Futures Trading Commission (CFTC) has intervened in a dispute between prediction market platform Kalshi and the state of Michigan. The federal regulator issued an order blocking Kalshi from canceling trades for its Michigan customers, overriding a recent court order from the state. A Michigan county circuit court had previously ordered Kalshi to cease offering sports-related event contracts to state residents, a move requested by the state's attorney general who argued these constituted illegal gambling. Kalshi had sought guidance from the CFTC on how to respond to this order, specifically regarding voiding, canceling, and refunding trades for Michigan users. CFTC Chair Michael Selig stated that the commission 'will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations.' He emphasized that allowing the cancellation of already executed trades would 'risk shattering public confidence' and undermine market certainty. The CFTC views Michigan's actions as an unprecedented interference with its exclusive regulatory authority over designated contract markets like Kalshi.