Michigan Court Bans Kalshi Sports Markets, Warns of Heavy Daily Fines

A Michigan state court has ordered Kalshi to shut down its sports markets in the state and face steep financial penalties if it fails to keep residents out of its platform.

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The preliminary injunction, issued by Judge Rosemarie E. Aquilina of the Ingham County Circuit Court, blocks the prediction market company from offering or facilitating any online sports wagers to people in Michigan or through channels accessible in the state.

The order follows a lawsuit filed by Attorney General Dana Nessel, who accused Kalshi of running an unlicensed sports betting operation under the cover of trading event contracts.

Nessel welcomed the ruling in a Wednesday press release, saying: “Kalshi long attempted to pass itself off as a legitimate gaming operation in our state, and I am relieved that this order further protects Michigan residents from its predatory, unlicensed practices.”

The injunction caps several months of litigation between Michigan and Kalshi. Attorney General Nessel first sued the company in March, alleging violations of the Lawful Sports Betting Act.

Before the preliminary injunction, Nessel had already secured a temporary restraining order in June that temporarily halted Kalshi from “engaging in or advertising its internet sports betting operation in Michigan.” The new order now extends that relief and will remain in effect until a final judgment is issued. 

Judge cites harm to youth, vulnerable players and public funding

In the written order, the court lays out why immediate relief was necessary. Judge Aquilina found that Michigan and “its most vulnerable citizens” were already suffering and would continue to face “immediate and irreparable harm” if Kalshi’s sports betting operation remained active. 

The judge pointed first to age limits. Michigan’s legal gaming framework requires bettors to be at least 21, but Kalshi allowed users to place wagers from age 18.

The court warned that if Kalshi continued to offer sports wagers, “the potential irreparable harm on Michigan’s youth would be profound.”

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The order also states that Kalshi “takes advantage of serious mental health issues without providing the protections that Michigan’s regulatory structure was designed to do” and “eludes the comprehensive patron protection mechanisms found in Michigan’s regulatory framework.”

The judge further noted that Kalshi’s conduct undermines funding streams tied to legal gaming, including money for schools, compulsive gambling prevention, economic development and first responders

Broad ban on sports wagering and strict geofencing requirements

The injunction does more than simply tell Kalshi to stop taking bets. It sets out detailed restrictions on what the company and anyone acting with it can do in relation to sports wagering in Michigan. 

The order bars Kalshi from “offering, listing, matching, executing, clearing, settling, or otherwise facilitating” any contract that counts as internet sports betting under Michigan law to people located in the state or through platforms accessible there.

It also prohibits accepting deposits or stakes tied to such contracts from Michigan users, and blocks advertising, promoting or marketing sports betting contracts to anyone using a Michigan address or located within state borders, whether via websites, apps, email, push notifications, social media, influencers or affiliates.

The court further bans account creation, verification, funding or maintenance for the purpose of accessing or trading sports betting products, and outlaws designing or operating products that are “functionally similar to internet sports betting,” listing examples such as single‑game bets, parlays, over‑unders, moneyline wagers, pools, exchange betting, in‑game betting, proposition bets, and straight bets.

To enforce these restrictions, the order requires Kalshi to use a third‑party geolocation provider licensed by the Michigan Gaming Control Board, capable of meeting the board’s geofencing specifications. 

If the court later finds that Kalshi did not comply with these geolocation requirements, the company must pay a fine of $500,000 for each day of non‑compliance.

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