Michigan has extended its ban on Kalshi’s sports event contracts and ordered the company to have geofencing controls in place by Aug. 12, with a $500,000 daily penalty if it fails to block Michigan users. The latest order tightens a fight that began in June, when a judge treated the contracts as illegal sports betting.
Michigan sued KalshiEx in March, saying it was offering online sports wagers under the guise of trading event contracts. After Kalshi tried to move the case into federal court, a U.S. District Court in western Michigan sent it back to state court, and the Ingham County Circuit Court then granted a temporary restraining order.
The June 29 order barred KalshiEx and related parties from offering, advertising, accepting deposits for, or otherwise facilitating internet sports betting in Michigan. It also required geolocation controls backed by a licensed provider or another provider the court approved, and set a $120,000 daily fine for non-compliance, based on a conservative estimate of Kalshi’s $600 million-a-day trading volume.
The court’s written reasons were sweeping. It said Michigan and its most vulnerable residents would suffer immediate and irreparable harm if Kalshi were allowed to operate, noted that state gaming law requires bettors to be 21 while Kalshi allows access from 18, and said the company was eluding patron-protection rules and taking an unfair advantage over regulated operators.
It also said the business was undercutting funding for schools, compulsive-gambling prevention, economic development and first responders, and harming Detroit and tribal revenues. Judge Rosemarie Aquilina summed up her view more bluntly: “You aren’t really talking about commodities, interest rates, things like that, but gambling, which has traditionally been denied by the states.”
Kalshi has argued that its contracts are federally regulated commodities and that the Commodity Futures Trading Commission has exclusive authority over prediction markets. The CFTC later said federal law requires registered derivatives exchanges to operate as a single national market, and that cancelling trades because a customer lives in Michigan would clash with the Commodity Exchange Act’s requirement of impartial access.
That federal intervention came after Kalshi proposed cancelling certain pending trades involving Michigan customers in response to the state court order. Michigan rejected the CFTC’s reasoning, saying the federal action interferes with its authority to regulate companies operating in the state.
Under the extended order, Kalshi must have the geofencing controls in place by Aug. 12. Enforcement begins Aug. 13 if it has not complied.
