Michigan Bans Kalshi Betting
Michigan Judge Temporarily Halts Kalshi's Sports Contracts Over State Law Violations, Imposing Daily Fine
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Key Points
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The TRO was granted ex parte, meaning Kalshi did not have a chance to present its case before the order was issued.
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The order lasts 14 days (through July 13) and imposes a potential $120,000 per day fine for noncompliance, creating immediate financial risk for Kalshi.
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The order bars Kalshi from offering sports event contracts in Michigan unless the company holds a Michigan sports betting license.
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The court requires Kalshi to use geolocation controls and, per related reporting, to employ a licensed third-party geolocation provider to ensure Michigan residents cannot access the sports betting products.
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The order highlights consumer-protection and sovereignty concerns, noting Kalshi’s access to 18+ customers in Michigan (vs. a 21+ threshold for sportsbooks) and potential harms including lost tax revenue and implications for tribes.
A Michigan judge blocked prediction market Kalshi from offering sports-related contracts to state residents on June 29, granting a 14-day temporary restraining order that expires July 13, according to Detroit News. The order carries a $120,000 per day fine for noncompliance and requires Kalshi to use a licensed third-party geolocation provider to keep Michigan users off its sports products.
Michigan Attorney General Dana Nessel sought the order, arguing Kalshi is running an unlicensed gambling operation under the guise of a financial product. Michigan becomes the second state to block Kalshi's sports contracts, following earlier actions in Massachusetts and Nevada, according to InGame.
Judge Issues Order Without Hearing Kalshi's Side
Ingham County Circuit Court Judge Rosemarie Aquilina granted the order ex parte — meaning Kalshi had no chance to argue its case before the ruling came down. She found "immediate and irreparable harm" to Michigan residents. The judge also emphasized the age gap: Kalshi allows 18-year-olds to trade, while Michigan sportsbooks require users to be 21, according to InGame.
Nessel called Kalshi a predatory platform that exploits residents under the "guise of a prediction market." She said her office is committed to enforcing "a level playing field" for licensed operators. The order bars Kalshi from offering sports event contracts in Michigan unless it holds a state sports betting license, according to Detroit News.
Kalshi Fights Back, Claims Federal Law Overrides State Rules
Kalshi is licensed by the federal Commodity Futures Trading Commission as a designated contract market. The company argues its sports contracts are financial derivatives — not bets — and that federal law gives it exclusive jurisdiction over its products. Elisabeth Diana, Kalshi's head of communications, said the company "won't be bullied by interests that care more about protecting their monopolies than their consumers," according to Bloomberg Law.
Kalshi tried to move the Michigan case to federal court in March 2026, but a federal judge sent it back to state court on June 22. That remand was a setback for Kalshi's federal preemption argument. The company says it will appeal the TRO while implementing geolocation restrictions in the meantime, according to Bloomberg Law.
State-Licensed Sportsbooks Welcome a Rival's Setback
Companies like FanDuel and DraftKings pay heavy state taxes and meet strict compliance rules in Michigan. They have long complained that Kalshi operates as "regulatory arbitrage" — gaining the same customers without the same costs. If states like Michigan succeed, Kalshi's path to its projected $22 billion valuation could be slowed by a patchwork of 50 different state rules, according to Freedom 96.9.
Other states are watching closely. Illinois recently passed a law taxing prediction markets the same as sportsbooks rather than banning them outright. Fifteen of 19 early state-level rulings have favored state regulators over prediction market platforms, according to research cited by InGame.
What Happens Next as the July 13 Deadline Approaches
The July 13 hearing will determine whether the restraining order becomes a longer injunction. Kalshi must prove federal law shields it from Michigan's Lawful Sports Betting Act. If it fails, the $120,000 daily fine stays in place and geolocation controls remain required, according to Bloomberg Government.
Legal analysts see this case as part of a broader strategy by state attorneys general to force a showdown — either a circuit split among federal appeals courts or a Supreme Court ruling that settles who controls prediction market products. The next two weeks in an Ingham County courtroom could shape that fight, according to Bloomberg Government.
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