Key facts
- A Michigan judge issued a temporary restraining order blocking Kalshi from allowing residents to place financial bets on sporting events.
- The order was issued at the request of Michigan Attorney General Dana Nessel.
- Nessel accused Kalshi of violating state gaming laws, including the Lawful Sports Betting Act.
- Kalshi faces a potential fine of $120,000 per day for failing to comply with geolocation requirements.
- The lawsuit argues that Kalshi's sports event contracts meet the definition of sports betting under Michigan law.
A Michigan judge has blocked prediction market operator Kalshi from allowing state residents to place financial bets on sporting events, citing violations of state gaming law. Ingham County Circuit Court Judge Rosemarie Aquilina issued a temporary restraining order at the request of Michigan Attorney General Dana Nessel.
Nessel's office filed a civil enforcement action against Kalshi, alleging the company operates an unlicensed internet sports betting platform in violation of Michigan's Lawful Sports Betting Act, the Michigan Gaming Act, and the Michigan Penal Code. The lawsuit argues that Kalshi's sports event contracts, such as point spread bets, over/under wagers, and proposition bets, meet the statutory definition of sports betting under Michigan law.
Kalshi, founded in 2018 and launched in 2021, initially offered event contracts on macroeconomic topics before expanding into political and sports-related contracts. The company's model involves users purchasing "Yes" or "No" positions on whether a particular event will occur, with prices fluctuating based on aggregate user sentiment.
Under the Lawful Sports Betting Act, internet sports betting in Michigan can only be conducted by licensed operators, and Kalshi is ineligible to apply for such a license. The judge warned that Kalshi could face a $120,000 fine for each day it fails to comply with the order's geolocation requirements.