Michigan has escalated its legal offensive against prediction market operator Kalshi after Ingham County Circuit Court Judge Rosemarie E. Aquilina issued a preliminary injunction requiring the platform to block Michigan residents and anyone physically present in the state from accessing sports-related event contracts. The order mandates third-party geolocation controls and sets a penalty of $500,000 per day for non-compliance.
The ruling follows a March lawsuit by Michigan officials alleging Kalshi violated the state's Lawful Sports Betting Act by offering sports wagers as event contracts without approval from the Michigan Gaming Control Board. The state argues that Kalshi’s status as a federally regulated derivatives exchange does not exempt its sports products from state gambling law. After Kalshi removed the case to federal court, Michigan secured a remand to Ingham County Circuit Court and obtained a temporary restraining order in June. Tuesday’s preliminary injunction replaces and extends that restriction while the underlying lawsuit remains unresolved.
Michigan Attorney General Dana Nessel said the order further restricts what the state views as unlicensed gambling. Kalshi had not publicly responded in the source material. The dispute is part of a wider state-by-state legal fight: Kalshi has faced enforcement action or litigation in more than a dozen states, and Connecticut sued the company last week. The platform recorded roughly $38.67 billion in August trading volume, far above Polymarket and Polymarket US combined at about $8.41 billion.
The core question is whether sports event contracts are federally regulated derivatives or state-regulated sports betting. If states succeed, prediction market operators may need more sophisticated geolocation systems, jurisdiction-specific product controls, and expanded legal teams while facing possible fragmentation of market access.
