A Michigan judge has issued a temporary restraining order against Kalshi, a prediction market operator, mandating that the company cease offering contracts on sporting events within the state.
In a ruling delivered on Monday, Ingham Circuit Court Judge Rosemarie E. Aquilina supported the request from Michigan Attorney General Dana Nessel. The judge emphasized that the state and its residents, who benefit from tax revenues generated by licensed sports betting operators, are being harmed and have been “exploited by Kalshi’s sports betting operation disguised as an investment opportunity.”
Judge Aquilina noted that Kalshi’s failure to comply with Michigan’s gaming regulations gives the New York-based exchange an “unfair advantage” over compliant operators. Furthermore, she pointed out that Kalshi disregards the rights of tribal gaming operators in the state.
Attorney General Nessel reiterated the commitment to ensuring fairness in Michigan's gambling landscape, stating, “We remain dedicated 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.”
Kalshi, which received approval from the U.S. Commodity Futures Trading Commission to offer sports contracts, contends that it cannot be blocked by Michigan or any other states due to federal oversight of prediction markets. The company began its sports contract offerings in January 2025, following regulatory changes during the Trump Administration.
The restraining order was issued shortly after a federal district judge dismissed Kalshi’s bid to have the case heard in federal court. The order will remain in effect until July 13, when the state may seek a longer-term preliminary injunction.
Michigan is now the third state to prohibit Kalshi from operating sports markets, following Nevada and Massachusetts, although the latter's ban is currently on hold as Kalshi appeals the decision.
As part of the restraining order, Kalshi must not only cease trades on sports betting contracts in Michigan but also engage a third-party geolocation service provider licensed by the Michigan Gaming Control Board to prevent Michigan users from accessing these markets. The court indicated it might allow Kalshi to utilize a vendor from another state if it meets the geofencing requirements.
Judge Aquilina has imposed a daily fine of $120,000 for each day Kalshi fails to comply with the geolocation stipulations. This figure was calculated based on a conservative estimate of Kalshi’s daily trading volume of $600 million, with the fine representing 1% of the estimated share of trades conducted in Michigan.
This requirement for a third-party solution follows feedback from regulators in another state, who determined that Kalshi’s geolocation software did not meet acceptable standards.
Earlier this month, Nevada officials requested a judge to find Kalshi in contempt for violating the injunction in that state due to its in-house geolocation solution, which reportedly cost less than $200,000 to develop. Court documents indicated that Kalshi’s geolocation solution relies on users’ IP addresses, and Nevada officials alleged that “family and friends” conducted testing for Kalshi.
Nevada gaming regulators have also sought a daily fine of $120,000 against Kalshi, in addition to legal fees, until the exchange’s geolocation solution complies with state standards.
In response to the restraining order, Kalshi’s Head of Communications, Elisabeth Diana, stated that the company intends to contest the ruling, asserting, “Kalshi is subject to exclusive federal jurisdiction. We won’t be bullied by interests that care more about their profits than the integrity of the market.”