Kalshi Hit with Temporary Restraining Order in Michigan

^{Michigan Attorney General Dana Nessel filed a lawsuit in March that led to a restraining order against Kalshi. (Photo: Andrew Roth / Sipa USA)}

A judge has granted a temporary restraining order in Michigan against prediction market platform Kalshi, making the state the second in the nation to successfully pause the company’s operations.

The order was signed by Ingham County Circuit Court Judge Rosemarie Aquilina on Monday, June 29.

Lawsuit Continues Nationwide Prediction Market Battle

The restraining order comes as the result of a lawsuit filed in March by Michigan Attorney General Dana Nessel. As in many other states, regulators and officials in Michigan have contended that Kalshi is overstepping the state's laws on sports betting by allowing users to trade contracts on sporting events.

“Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences,” Nessel said in a statement on the Michigan Department of Attorney General website. “We remain committed to enforcing a level playing field for all gambling platforms in Michigan and ensuring that companies cannot evade accountability or exploit consumers under the guise of a prediction market.”

As Nessel alluded to in her statement, Kalshi had hoped to get the case heard in federal court, trying to move the dispute to the U.S. District Court for the Western District of Michigan. While states have argued that Kalshi’s contacts violate their own gaming laws, Kalshi and other prediction sites say they are regulated only by the federal Commodity Futures Trading Commission (CFTC), which has aggressively defended prediction markets against state lawsuits.

That might eventually see the legal battles over prediction markets head to the Supreme Court of the United States. But for now, Kalshi will be prohibited from offering sports betting contracts or advertising such offerings in the state of Michigan.

Kalshi Now Out of Two States

With its court win, Michigan will be the second state with high-profile bans or orders against Kalshi. The other is Nevada, which secured a temporary injunction to prevent the platform from offering sports, political and entertainment markets in the state. Recently, Nevada regulators have gone back to court, arguing that Kalshi isn't effectively stopping Nevadans from accessing those markets.

The legal questions ultimately come down to how sports event contracts are classified. Regulators across the country say that Congress never meant to expand the CFTC’s authority to authorize this wide a range of markets, and even federal lawmakers have expressed skepticism over the current state of affairs. 

But the CFTC and prediction markets argue that these platforms are fundamentally different from sports betting, and exist as financial products with value to consumers. Michigan regulators celebrated their victory in court, saying it was a win for consumer protection standards in the state.

“Kalshi is targeting Michigan’s most vulnerable residents with sports betting dressed up as investing – and without intervention, the harm will keep getting worse,” Michigan Gaming Control Board Executive Director Henry Williams said in a statement. “Our licensed sportsbooks follow strict rules designed to protect consumers – verifying that bettors are at least 21 years old, offering responsible-gaming tools, and protecting patron funds. 

"Kalshi has refused to play by the same rules, and our agency will continue to use every regulatory and legal tool available to make sure Michigan families, our schools, and our first responders are protected from this unchecked exploitation.”