Quick Insights

  • An Ingham County Circuit Court judge issued a 14-day temporary restraining order against Kalshi's sports event contracts in Michigan, fining the platform $120,000 for each day it fails to comply with geolocation requirements blocking state residents.
  • The order came four days after a federal judge remanded Michigan's case back to state court, finding Kalshi had failed to establish federal jurisdiction, a procedural defeat that cleared the path for the state's restraining order.
  • Michigan becomes the second state after Nevada to secure a court-ordered block on Kalshi's sports contracts, arriving as Kalshi's monthly trading volume has surged more than 79% to over $30 billion amid record World Cup activity.

An Ingham County Circuit Court judge issued a temporary restraining order against Kalshi on Monday, barring the prediction market from offering sports event contracts to Michigan residents for 14 days. Judge Rosemarie Aquilina granted the order at the request of Michigan Attorney General Dana Nessel, who has accused Kalshi of operating unlicensed sports betting in violation of the state's Lawful Sports Betting Act. The order requires Kalshi to use a licensed third-party geolocation provider to block Michigan users, with a fine of $120,000 for every day the platform fails to comply.

In her written decision, Aquilina argued that Michigan's "most vulnerable citizens" face irreparable harm from what she called "Kalshi's sports betting operation masquerading as an investment opportunity." She specifically flagged the age threshold: Michigan's licensed sports betting market requires bettors to be 21 or older, while Kalshi allows users as young as 18 to trade sports event contracts. Aquilina also wrote that Kalshi's structure gives it an unfair advantage over operators that comply with Michigan's regulatory framework, and that unlicensed sports betting deprives the state, municipalities including Detroit, and Native American tribes of gaming tax revenue that funds public services.

A Federal Court Sent the Case Back to Michigan Days Before the Ruling

The timing of Monday's order is not incidental. Nessel originally filed her lawsuit against Kalshi in Ingham County Circuit Court in March, and Kalshi subsequently sought to move the case to federal court, arguing that its sports event contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission. US District Judge Paul Maloney ruled on June 25 that the case belonged in state court, finding that Kalshi had not adequately shown federal law preempted Michigan's gaming statute. That remand cleared the procedural obstacle that had been holding up Nessel's request for injunctive relief, and the state restraining order followed four days later.

Kalshi has signalled it will continue fighting the decision. "It's no surprise that we disagree with the state's decision and will fight it in court," said Elisabeth Diana, Kalshi's head of communications, in a statement. "Kalshi is subject to exclusive federal jurisdiction. We won't be bullied by interests that care more about protecting their monopolies than their consumers. In the meantime, we're implementing restrictions." The company has not announced whether it will appeal the order itself or focus on the underlying jurisdictional dispute.

The State-by-State Legal Battle
  • Michigan: 14-day restraining order issued June 29, expires July 13, $120,000 daily fine for non-compliance
  • Nevada: Temporary restraining order issued in March 2026, the first such state-level block
  • Massachusetts: A similar injunction has been stayed while Kalshi pursues an appeal
  • Kentucky: Sued five prediction market platforms, including Kalshi and Polymarket, on June 17
  • CFTC: Has sued multiple states, including New Mexico, arguing federal jurisdiction over event contracts is exclusive

Kalshi's Volume Hit $30 Billion This Month Even as the Legal Pressure Mounts

The legal setback arrives despite Kalshi's strongest trading month on record. The exchange has attracted more than $30 billion in volume so far in June, a 79% increase from May, driven heavily by sports contracts tied to the FIFA World Cup. Daily prediction market taker volume across the industry hit a record $713 million on June 20, and sports betting volume on Kalshi rose 40% to $9.5 billion for the month, while rival Polymarket saw sports volume climb 175% to $5.3 billion. The disconnect between Kalshi's commercial momentum and its mounting legal exposure is becoming the defining tension in the prediction market sector: the World Cup is driving record demand for exactly the product category that state regulators are working hardest to block.

More than a dozen states have now taken some form of enforcement action against Kalshi, Polymarket or other prediction market platforms, while the CFTC has pushed back by suing states directly over jurisdiction. Neither side has secured a definitive ruling on the core legal question: whether federally regulated event contracts preempt state gambling law, or whether states retain authority to require separate gaming licenses for products that function like sports bets regardless of how they are structured. Michigan's order is temporary and procedural rather than a final judgment on that question, but each new state-level win adds pressure on Kalshi heading into a period when the company is reportedly in early talks with investment banks about a public listing.

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