Hassan Maishera
TL;DR
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A Michigan court has issued a preliminary injunction requiring Kalshi to block state residents from accessing sports-related event contracts.
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Kalshi must use a licensed third-party geolocation provider to enforce the restriction.
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Violations could result in fines of $500,000 per day.
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The injunction will remain effective until the court issues a final ruling.
A Michigan state court has ordered Kalshi to continue preventing residents from accessing sports-related event contracts while a lawsuit against the prediction market platform proceeds.
Ingham County Circuit Court Judge Rosemarie E. Aquilina issued the preliminary injunction on Tuesday, according to a statement released Wednesday by Michigan Attorney General Dana Nessel.
The restrictions will remain in place until the court reaches a final decision in the case.
Kalshi Must Use Licensed Geolocation Provider
The injunction requires Kalshi to employ a third-party geolocation service licensed by the Michigan Gaming Control Board.
The provider must ensure that Kalshi complies with the state’s geofencing requirements and prevents people located in Michigan from accessing sports event contracts.
Failure to comply could expose Kalshi to fines of $500,000 for each day the platform violates the order.
The substantial daily penalty increases the financial consequences of any failure to maintain effective location restrictions.
Michigan filed its lawsuit against Kalshi in March, accusing the company of violating state sports betting laws.
The state argues that Kalshi allows residents to participate in sports gambling while presenting the activity as the trading of federally regulated event contracts.
Kalshi operates as a designated contract market regulated by the Commodity Futures Trading Commission. The company has argued in other cases that its federal status permits it to offer event contracts nationwide.
State regulators maintain that sports-related contracts function like conventional wagers and must comply with local gaming and licensing laws.
Injunction Replaces Temporary Restraining Order
The preliminary injunction converts an earlier temporary restraining order issued against Kalshi in June.
A temporary restraining order generally provides short-term relief while a court considers whether longer restrictions are appropriate. The new injunction keeps the block in place throughout the remaining legal proceedings.
Kalshi attempted to transfer the lawsuit to federal court. However, the U.S. District Court for the Western District of Michigan granted the state’s request to return the case to the state court.
Nessel welcomed the court’s decision and described Kalshi’s activities in the state as unlawful.
“Kalshi long attempted to pass itself off as a legitimate gaming operation in our state, and I am relieved that this order further protects Michigan residents from its predatory, unlicensed practices,” she said.
The statement represents Michigan’s allegations and position in the ongoing litigation. The court has not yet issued a final judgment on the underlying claims.
Kalshi had not publicly responded at the time of the original report.
Kalshi Faces Legal Challenges Across the U.S.
Michigan is one of more than a dozen states that have taken enforcement action or filed lawsuits against Kalshi.
The disputes largely concern whether sports event contracts should be regulated exclusively as federally supervised derivatives or treated as gambling products subject to state law.
Connecticut sued Kalshi last week in an attempt to prevent the platform from offering sports-related contracts to residents.
The case escalated a dispute that had already continued for several months between Kalshi and Connecticut authorities.
Despite growing legal pressure, Kalshi remains the dominant platform in the prediction markets sector.
The company generated $38.67 billion in trading volume during August, according to The Block’s data.
By comparison, Polymarket and Polymarket US recorded a combined $8.41 billion over the same period.
Kalshi’s substantial volume demonstrates strong demand for event contracts, but its continued access to individual U.S. states will depend on the outcomes of several ongoing regulatory and legal disputes.
