Michigan Court Orders Kalshi to Halt Sports Betting

A Michigan court has ordered prediction market operator Kalshi to stop offering sports betting markets to customers in the state, with the company potentially facing fines of up to $500,000 for each day it fails to comply.

Ingham County Circuit Court Judge Rosemarie E. Aquilina issued the preliminary injunction following a lawsuit brought by Michigan Attorney General Dana Nessel. The lawsuit alleges that Kalshi has been operating sports betting markets illegally in Michigan.

The injunction extends a temporary restraining order that was issued in June and will remain in effect until the court’s ruling becomes final.

The court found that Kalshi’s continued offering of sports wagering contracts could pose a risk to Michigan residents, particularly vulnerable individuals. Under Michigan’s rules, residents must be at least 21 years old to participate in sports betting, while Kalshi allows users aged 18 and above.

According to the order, 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.”

Restrictions Cover Sports Contracts and Promotion

The injunction prevents Kalshi from offering or conducting sports contracts involving people located in Michigan.

The restrictions also prohibit the company from allowing Michigan residents to make deposits or operate accounts connected to the restricted markets. Kalshi is additionally barred from advertising the sports contracts through websites, mobile applications, email, social media, bloggers and other channels.

Kalshi Required to Implement Geofencing

As part of the order, Kalshi must use a third-party geolocation provider that is licensed by the Michigan Gaming Control Board.

The requirement is intended to prevent Michigan residents from accessing sports markets that have been prohibited under the injunction.

If the court determines that Kalshi has failed to satisfy the required geofencing standards, the operator could be subject to a penalty of $500,000 for every day it remains out of compliance.

The preliminary injunction will continue to apply while the legal proceedings move forward and until the ruling becomes final.