A Michigan court has temporarily stopped prediction market platform Kalshi from operating in the state, marking an early legal victory for Attorney General Dana Nessel in a dispute over whether the company’s event contracts should be treated as sports betting under Michigan law.
Ingham County Circuit Judge Rosemarie Aquilina issued a temporary restraining order on June 29 that prevents Kalshi from continuing to offer its products in Michigan while the case moves forward. The order follows a lawsuit filed by Nessel in March alleging that Kalshi conducts activities comparable to sports wagering without obtaining the licenses required of sportsbooks and casinos regulated by the state.
According to Detroit Free Press, the judge wrote: “Michigan and its most vulnerable citizens are suffering and will continue to suffer immediate and irreparable harm absent relief from being exploited by Kalshi’s sports betting operation masquerading as an investment opportunity.”
Court Places Temporary Restrictions on Kalshi
The ruling imposes broad limits on the New York-based company’s activities in Michigan. Aquilina barred Kalshi from offering wagers or event contracts, accepting deposits, advertising its services, opening new accounts, or introducing similar products within the state during the period covered by the order.
The temporary restraining order remains in effect until July 13 while additional legal proceedings continue. Court records did not indicate any upcoming hearing dates.
Aquilina also directed Kalshi to use a third-party geolocation provider licensed by the Michigan Gaming Control Board to ensure compliance with the restrictions. According to the order, the company could face fines of $120,000 per day if it fails to meet the geolocation requirements.
Michigan became the second state to obtain a court-ordered halt against Kalshi’s event contracts, following Nevada. A similar injunction in Massachusetts has been paused while the company pursues an appeal.
State Raises Concerns Over Consumer Protections
Michigan legalized online gambling in 2021 and requires operators to obtain approval from the Michigan Gaming Control Board. One issue highlighted in the case involves age requirements. Kalshi allows participation beginning at age 18, while Michigan’s regulated online sportsbooks require users to be at least 21.
The judge cited several concerns in her decision, including the effect on younger users and the absence of protections found within the state’s gaming framework. Court filings included Aquilina’s statement: “If Kalshi is allowed to continue to offer sports wagers, the potential irreparable harm on Michigan’s youth would be profound.”
Additional findings referenced in the court documents stated that “Kalshi takes advantage of serious mental health issues without providing the protections that Michigan’s regulatory structure was designed to do,” and that the company bypasses patron-protection measures required of licensed operators.
The filings also argued that Kalshi gains “a massive and unfair advantage” by operating outside Michigan’s gaming regulations. Other concerns raised in the case involved public funding connected to gaming revenue. According to the court documents, “Kalshi is undercutting Michigan’s funding for schools, compulsive gambling prevention, economic development, and first responders.”
The judge further noted concerns about impacts on tribal governments, writing that “Kalshi’s conduct negatively impacts Tribes by depriving them of the revenue they need to operate their governments and serve their citizens, while also ignoring their sovereignty.”
Janine Ruggiero of the Michigan Association on Problem Gambling supported the court’s concerns regarding younger participants. She said, “At 18 years old, the mind has not matured in such a way to have the guard rails of impulse control, to not get swept up in the hype.”
Kalshi Maintains Federal Law Governs Its Business
Kalshi has consistently argued that its products fall under federal oversight rather than state gaming regulations. The company describes its platform as a prediction market where users trade contracts tied to the outcomes of future events rather than place traditional wagers.
The company’s markets cover a wide range of topics, including sports, politics, business developments, and cultural events. Featured contracts have included predictions related to the FIFA World Cup, NCAA March Madness, Elon Musk’s net worth, LeBron James’ next NBA team, and future presidential nominees.
Kalshi spokesperson and Head of Communications Elisabeth Diana said the company would comply with the court order while continuing to challenge it.
“It’s no surprise that we disagree with the state’s decision and will fight it in court,” Diana said. “We won’t be bullied by interests that care more about protecting their monopolies than their consumers. In the meantime, we’re implementing restrictions.”
In a separate statement, Diana said, “It’s no surprise that 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.”
She also stated that the company would be implementing restrictions “to comply with court orders even when we believe they are wrong.”
Kalshi recently received a valuation of $22 billion in a funding round and remains a central figure in the broader legal debate over prediction markets. The company and similar platforms argue that the contracts traded on their exchanges fall under the authority of the U.S. Commodity Futures Trading Commission (CFTC). Under President Donald Trump‘s administration, the CFTC has supported the view that these event contracts fall within the agency’s jurisdiction.
Kalshi previously sought to move the Michigan case into federal court. That effort failed when U.S. District Judge Paul Maloney determined that Michigan’s gambling laws were not displaced by federal trading regulations and returned the matter to state court.