Michigan courts ban Kalshi from offering sports event contracts in the state
Attorney General Dana Nessel secures a temporary restraining order against the prediction markets platform, stipulating its sports offering is geofenced for a 14-day period
A Michigan court has granted a temporary restraining order (TRO) against Kalshi, preventing the platform from offering sports event contracts in the state.
The order, which comes into effect immediately and lasts until 13 July, stipulates Kalshi will have to use a third-party geolocation provider licensed by the Michigan Gaming Control Board (MGCB) to prevent state residents from accessing its sports event contracts.
Kalshi has the option to propose a third-party geolocation provider licensed in another state, with the MGCB having the final say on whether the chosen supplier can be used.
The New York-based firm has the right to appeal the decision, although it could face fines of up to $120,000 per day for failure to comply with restrictions.
Michigan Attorney General (AG) Dana Nessel first filed for the TRO with the Ingham County Circuit Court in March, alleging that Kalshi’s sports event contracts constituted a form of illegal sports betting in the Great Lakes State.
A Kalshi spokesperson said: “It’s no surprise we disagree with the state’s decision and will fight it in court. Kalshi is subject to exclusive federal jurisdiction.
“We won’t be bullied by interests that care more about protecting their monopolies than their consumers. In the meantime, we’re implementing restrictions.”
Kalshi had requested that the case be escalated to federal court level, leading Nessel to file a motion to remand.
However, judge Paul Maloney ruled the case belonged in state court as the lawsuit involves a violation of Michigan law.
Nessel said the ruling helps to stop platforms such as Kalshi “evade accountability or exploit consumers”.
She remarked: “Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences.
“I am proud of the attorneys in my office who not only kept this case in state court but also secured an order protecting residents as this litigation moves forward.
“We remain committed to enforcing a level playing field for all gambling platforms in Michigan and ensuring that companies cannot evade accountability or exploit consumers under the guise of a prediction market.”
Michigan becomes the second state to successfully ban Kalshi’s sports event contracts after Nevada regulators secured a preliminary injunction against the company in April, leading to a 14-day shutdown of the platform’s operations in the Silver State.
The Nevada Gaming Control Board also asked the state’s district court to hold Kalshi in contempt for failing to comply with a judicial order against the offering of sports betting.
The Michigan ruling marks Kalshi’s latest battle against state regulators in recent months.
In May, Rhode Island AG Peter Neronha filed a lawsuit against both Kalshi and Polymarket over the offering of sports event contracts.
Regulators in Washington and Ohio have also hit Kalshi with either preliminary injunctions or fines for what they argue is the promotion of unlicensed sports betting products.
Internationally, Kalshi has faced difficulty in Spain, with the platform blocked by the government and gambling regulator as they opened up disciplinary proceedings against the company.
In May, Kalshi raised $1bn during a Series F funding round, securing the New York-headquartered firm a $22bn valuation.
Earlier in June, CEO Tarek Mansour confirmed the company was in the early stages of preparing for an initial public offering (IPO).