Michigan is not backing down from its opposition to Kalshi, the popular sports prediction market, which continues to come under assault by state gaming regulators and attorneys general.
One of those states, toughening its stance, is now Michigan, which has said that sports event contracts offered by Kalshi will remain blocked in the state, and that the company had a further obligation to geofence the state by August 12, 2026, or face a $500,000 fine for non-compliance.
Clock Is Ticking on Kalshi Complying with Geofencing Order
Geofencing would mean that Kalshi needs to restrict access to Kalshi to any Michigan-based person. This comes after, on June 29, Judge Rosemarie Aquilina of the 30th Circuit Court agreed with the state’s argument, confirming that the platform offered illegal gambling.
Aquilina dismissed Kalshi’s arguments that it was offering a financial product, with the judge arguing:
“But you aren’t really talking about commodities, interest rates, things like that, but gambling, which has traditionally been denied by the states.”
Kalshi was at the time ordered to geofence the state or pay a $120,000 daily fine for each day of non-compliance. However, the initial ruling was then paused, with the judge agreeing to hear Kalshi’s arguments on how feasible geofencing would be and at what timeline it could be implemented.
In other words, Kalshi would have been obligated to geofence its offer in the state much sooner but has now resorted to the option while a final geofencing blockage comes into place.
Michigan’s track record in dealing with Kalshi is impressive in its own right, as the Great Lakes State is only one of two – the other one being Nevada – to successfully enforce blocking orders against prediction market platforms.
Kalshi has been working with GeoComply to try to enforce the geofencing mandated by the judge, but the timeline remains murky, with the company genuinely not sure if it can meet the deadline set by the judge.
Work on Geofencing Is Going Strong
Kalshi lawyer Will Havemann has said that while the company was going to push back against the ruling, it sought to comply with all court decisions so far, putting in the hard work to ensure geofencing. However, work is still underway, but the timing remains fluid.
“The honest answer is that I don’t know yet. I think that will be clearer after our engineers talk to one another,” Havemann said, which could see the company be able to comply with the August 12 deadline.
The state, however, and Assistant Attorney General Lauren Fitzsimons have cautioned that platforms like caution may have a real incentive to delay the implementation of geofencing.
“Part of why Kalshi is trying to drag this out is the World Cup. Over the last 30 days, Kalshi’s volume has been $30 billion,” Fitzsimons noted. While this may be true, if Michigan turfs out Kalshi successfully, the platform would have been dealt a serious setback that a short-term windfall could not make up for.
Most recently, Kalshi suffered another setback in New York, where an attempt to overturn a preliminary injunction fell through.