Michigan Judge Blocks Kalshi Sports Betting Contracts
In brief
- Judge Rosemarie Aquilina issued 14-day temporary restraining order with $120,000 daily fine
- Michigan attorney general accused Kalshi of violating state gambling laws
- Michigan becomes second state to court-order Kalshi sports contract ban after Nevada
State enforcement escalates
Judge Aquilina issued the restraining order after Michigan's attorney general accused Kalshi of violating state gambling laws. The order lasts 14 days and expires on July 13. This makes Michigan the second US state to enact a court-ordered ban on Kalshi's sports event contracts, following Nevada's action earlier this year.
The judge wrote that Michigan residents would suffer irreparable harm from being exploited by Kalshi's sports betting operation. The state framed the case as a violation of its gambling statutes, which do not permit unregulated prediction markets to operate within its borders.
Broader legal conflict
More than a dozen other states have taken prediction market operators to court. On June 17, Kentucky sued five platforms including Kalshi and Polymarket, accusing them of operating unlicensed sports betting platforms. The litigation reflects a growing divide between state gambling regulators and the prediction market industry.
The US Commodity Futures Trading Commission (CFTC) has sued several states, arguing that federally regulated event contracts fall under its exclusive authority. This federal-state clash creates legal uncertainty for platforms caught between competing regulatory regimes.
Market momentum
Despite the legal headwinds, sports betting volume rose 40% to $9.5 billion on Kalshi and 175% to $5.3 billion on Polymarket on a monthly basis. Daily prediction market taker volume reached a record $713 million on June 20, signaling strong user demand even as courts issue restraining orders.
