Michigan Extends Kalshi Sports Contract Ban Into August

Key Highlights

Kalshi users in Michigan will have to continue making alternative sports betting plans for the foreseeable future. Ingham County Judge Rosemarie Aquilina extended a temporary restriction on the prediction market platform’s sports event contracts.

Court Extends Michigan Restrictions

Kalshi’s sports event contracts will remain unavailable in Michigan for an unspecified period of time. Judge Aquilina didn’t establish a specific expiration date for the restriction, meaning the contracts could remain blocked while the legal dispute continues.

Aquilina also ordered Kalshi to implement geofencing across Michigan by the end of Aug. 12. The technology would prevent customers physically located in the state from accessing the company’s sports event markets.

The parties are expected to return to court next week as the case moves forward.

Kalshi Faces Potential Daily Fine

The latest ruling follows Aquilina’s June 29 decision that Kalshi’s sports event contracts constituted illegal sports betting under Michigan law. That ruling initially imposed a two-week ban and threatened the company with a $120,000 penalty for each day the platform offered sports contracts in the state.

The judge later paused the geofencing requirement, temporarily allowing Kalshi to restrict contracts based on users’ registered addresses. The new order replaces that temporary arrangement with a deadline for full location-based blocking.

Kalshi could face a $500,000 fine for each day it fails to comply after Aug. 12. Aquilina indicated that additional penalties could apply if the company delays implementation through the original 30-day penalty period.

Kalshi has argued that its contracts fall under the federal Commodity Exchange Act and the oversight of the Commodity Futures Trading Commission (CFTC). State attorneys maintain that sports betting falls within the state’s regulatory authority alongside Michigan online casinos and sportsbooks.

Michigan Takes Central Regulatory Role

Prediction market platforms, state regulators, and the CFTC are involved in multiple legal disputes over whether sports contracts should be governed by states or federal commodities law. Courts have issued differing decisions, making an eventual US Supreme Court settlement more likely.

Michigan is the second state to prohibit Kalshi’s sports event contracts. Nevada, which first temporarily blocked Kalshi in March, initially relied on address-based restrictions before moving to an internal geolocation system. In May, Minnesota banned prediction market platforms, prompting a lawsuit from the CFTC.

State-level prohibitions could create significant challenges for prediction market platforms because their business models depend on widespread participation and sufficient market liquidity. Losing access to individual states will reduce both the number of customers and trading activity on each contract.

Michigan regulators have taken an aggressive approach toward the sector. The Michigan Gaming Control Board recently left the National Council on Problem Gambling after the organization granted Kalshi membership. The regulator has also targeted unlicensed gambling operators offering services within the state.