Michigan Just Slammed the Brakes on Kalshi's Sports Contracts
Key Facts
- Ingham County Circuit Court Judge Rosemarie E. Aquilina granted Michigan Attorney General Dana Nessel's request for a 14-day temporary restraining order against Kalshi on June 29, effective through July 13.
- The order bars Kalshi from offering or advertising sports event contracts to Michigan residents, blocks new registrations, and requires the company to use a licensed third-party geolocation provider.
- Noncompliance with the geofencing requirement carries a potential fine of $120,000 per day.
- The order follows a federal court's decision to send Nessel's lawsuit back to state court after Kalshi tried to move it to federal jurisdiction.
Michigan Gets A Short-Term Win Against Kalshi
An Ingham County judge granted Attorney General Dana Nessel’s request for a temporary restraining order against KalshiEx LLC, temporarily stopping the company from offering sports event contracts to people located in Michigan.
The order was issued June 29 and remains in effect for 14 days, until July 13, 2026.
The case centers on whether Kalshi’s sports event contracts should be treated as federally regulated financial contracts or as sports betting under Michigan law.
Nessel’s office argues that Kalshi is offering online sports wagers without approval from the Michigan Gaming Control Board. Kalshi’s position is that its event contracts fall under exclusive federal jurisdiction because it is regulated by the Commodity Futures Trading Commission.
The Order Goes Beyond Simply Blocking Markets
Judge Rosemarie E. Aquilina’s order bars Kalshi from offering, listing, matching, executing, clearing, settling, or otherwise facilitating contracts that constitute internet sports betting to anyone located in Michigan. It also blocks Kalshi from accepting deposits or fees connected to those contracts, advertising or marketing them to Michigan users, and allowing account activity for the purpose of accessing or trading those products.
The language itself is quite broad, covering any products the order describes as functionally similar to sports betting, including single-game bets, parlays, over-unders, moneylines, exchange betting, in-game betting, proposition bets, and straight bets.
That scope is important because it targets the function - not the name - of the product. For regulators, that is the central point: if a product behaves like a sports betting market, they want state gambling law to apply regardless of whether the platform calls it a contract.
Geolocation Is The Most Important Part
The most consequential requirement may be the geolocation mandate. The order requires Kalshi to use a third-party geolocation services provider licensed by the Michigan Gaming Control Board, or another provider licensed by a gaming regulator in another state if the court approves it. The provider must be capable of meeting Michigan’s geofencing specifications.
That is a meaningful practical concession to the state’s theory of the case. Regulated sportsbooks are built around state-by-state access controls. By ordering Kalshi to use gambling-style geolocation for sports event contracts, the court is requiring the platform to behave more like a state-regulated betting operator while the litigation continues.
The order also creates a clear compliance risk. Kalshi must pay $120,000 per day for each day it fails to comply with the geolocation requirements. The order says that amount is based on a conservative estimate using Kalshi’s $600 million-per-day trading volume, divided by 50 to approximate Michigan’s share, then applying 1% to estimate fees on those transactions.
Nessel Frames The Case As Consumer Protection
Nessel’s office said the order follows Kalshi’s failed effort to move the lawsuit to federal court. In a June 25 order, U.S. District Judge Paul L. Maloney granted remand, finding that Kalshi’s theories for federal jurisdiction were not ultimately convincing, while acknowledging they arose in a “rapidly evolving area of law.”
Nessel framed the state-court order as a consumer protection and gambling-law enforcement matter. “Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences,” Nessel said in a statement. She added that the state remains committed to “ensuring that companies cannot evade accountability or exploit consumers under the guise of a prediction market.”
Why This Matters For Bettors
For bettors, the direct effect is narrow but immediate: Michigan users lose access to Kalshi's sports-related contracts for at least two weeks, and the geofencing requirement means that access won't come back automatically even after the order expires, since compliance infrastructure has to be in place.
Bettors who split action between licensed sportsbooks and prediction market platforms should expect Michigan to be an unavailable market until the underlying suit is resolved one way or another.
The bigger relevance is structural. This order is one of the more concrete instances of a state court treating Kalshi's sports contracts like a gambling product in practice - geofencing, advertising restrictions, and daily fines are gambling-regulation tools, not securities-law tools. That matters because the core dispute nationally is about which framework applies. A state court imposing gambling-style remedies, even temporarily, adds to the record regulators can point to as courts sort out whether the Commodity Exchange Act preempts state betting law.
Competitively, the order reinforces the gap between licensed sportsbook operators - who already build in age verification, deposit limits, and self-exclusion tools - and prediction market platforms that have argued they sit outside that regulatory perimeter. Aquilina's order specifically cited that asymmetry, and Michigan's Gaming Control Board has made the same argument publicly.
If more courts adopt that framing, prediction market platforms could face pressure to adopt sportsbook-style consumer protections voluntarily, rather than wait for a final ruling on jurisdiction.
On precedent, the Michigan order lands in a genuinely split legal landscape. The Third Circuit ruled in Kalshi's favor against New Jersey in April, while the Sixth Circuit - which covers Michigan - has been openly skeptical of Kalshi's preemption arguments, a tension Judge Maloney noted directly in his remand opinion.
That circuit split is a strong signal this issue is headed toward the U.S. Supreme Court. Until it gets there, operators and bettors alike should expect the legal status of sports event contracts to keep varying by state, sometimes sharply.
What Happens Next
The temporary restraining order runs through July 13, 2026, unless it is extended, replaced, modified, or dissolved by further court action. The underlying lawsuit remains in Ingham County Circuit Court after the federal remand ruling.
The next issue is whether Michigan can convert this short-term order into longer-lasting injunctive relief. Kalshi will continue arguing that federal commodities law preempts state gambling enforcement, while Michigan will argue that the state retains authority to stop unlicensed sports betting activity offered to residents.
Other states will be watching the remedy as closely as the legal reasoning. A court-ordered geolocation requirement is easier to understand and enforce than an abstract jurisdictional ruling. If Michigan can keep Kalshi’s sports markets blocked through state-court process, expect more regulators to pursue the same path.
Kalshi’s response will also matter. Implementing restrictions may limit immediate sanctions, but it does not settle the business problem: a national sports prediction-market product becomes much harder to scale if each state can force local compliance while the federal question remains unresolved.
Marcus has spent over 20 years navigating the legal side of online betting - from his early days consulting for offshore operators to helping licensed U.S. sportsbooks launch in regulated markets. He’s worked with compliance teams, reviewed licensing frameworks in 15+ states, and advised on some of the biggest regulatory shifts since PASPA was repealed.
At BettingScanner, Marcus serves as the voice of reason - translating legalese into plain English and helping bettors understand what’s legal, what’s risky, and where the gray areas live. If you’re ever unsure about the rules, Marcus is your man - as he probably helped write them.
