Michigan Judge Orders Kalshi to Stop Sports Betting, Imposes $500K Daily Fine
In brief
- Judge Rosemarie Aquilina ruled Kalshi operates as unlicensed sports betting service masquerading as investment opportunity
- Kalshi must geofence Michigan, cease app and influencer advertising, and pay $500,000 per day of non-compliance
- Michigan requires bettors be 21; Kalshi accepts 18-year-old users, court order notes
- CFTC sued nine states over prediction market bans, backing Kalshi's federal trading rights
The order and its scope
The injunction bars Kalshi from accepting deposits from Michigan residents, advertising through apps, push notifications, influencers, affiliates or paid placements, and from allowing account creation or funding by state residents. Compliance requires use of a third-party geolocation provider licensed by the Michigan Gaming Control Board. Within three business days, Kalshi must send the order to every futures commission merchant that offers its sports contracts.
The order stands until a final judgment in the case.
Age and regulatory gaps
Michigan requires bettors to be 21, while Kalshi accepts bettors at 18. Judge Aquilina found the platform sidesteps patron protections in Michigan's regulatory framework, undercuts funding for schools, compulsive gambling prevention and first responders, and deprives Tribes of revenue.
Michigan Attorney General Dana Nessel sued Kalshi in March under the state's Lawful Sports Betting Act, arguing the company lets residents bet on sports under the guise of trading event contracts. A temporary restraining order followed in June, and both sides asked the judge to rule at an August 17 hearing.
Federal friction and appeals ahead
Kalshi moved the case to federal court and lost, returning it to Ingham County. The platform's defense team includes Neal Katyal, a former acting U.S. solicitor general.
The Michigan ruling arrives amid a broader clash over prediction markets. A Washington judge ordered Kalshi to drop most markets in August, and days after that order, the Commodity Futures Trading Commission used emergency powers to keep Kalshi trading. The CFTC has sued nine states over the same question, starting with Illinois, Arizona and Connecticut, then Wisconsin, then Minnesota within hours of its ban taking effect.
President Donald Trump has called state officials who oppose prediction markets "SCUM," signaling federal support for the platform's trading rights.
