Michigan’s attorney general says a state court has issued a preliminary injunction against Kalshi, preventing the prediction markets platform from offering event contracts to residents. The order, announced by Attorney General Dana Nessel this week, is framed by officials as an effort to curb what they describe as unlicensed “sports betting” conducted under an investment-like presentation.
According to Nessel’s office, the Circuit Court for the 30th Judicial Circuit in Ingham County granted the state order blocking Kalshi from providing event contracts to Michigan residents. The notice also states that Kalshi could face fines of up to $500,000 per day if the court’s directive is violated.
Key takeaways
- Michigan obtained a preliminary injunction limiting Kalshi’s ability to offer event contracts to state residents.
- Officials argue the activity amounts to sports gambling presented as an investment opportunity, which they say remains unlicensed under Michigan law.
- The injunction follows an earlier Michigan restraining order in June that Kalshi said placed it in conflict with a CFTC directive.
- New Jersey simultaneously moved the dispute toward the US Supreme Court, raising the possibility of a higher-court resolution of regulatory jurisdiction.
- Lawmakers have also proposed legislation targeting prediction market contracts that resemble sports betting or casino-style games.
Michigan targets Kalshi’s event contracts
In a Wednesday notice, Attorney General Dana Nessel said the state court’s order halts Kalshi from offering event contracts to Michigan residents. Nessel linked the action to her ongoing lawsuit filed earlier this year, alleging Kalshi violated Michigan law governing sports gambling.
In her statement, Nessel said Kalshi had attempted to operate in a way that mischaracterized its activities, and she presented the injunction as further protection for residents against what she described as “predatory, unlicensed practices.”
The court’s filing, as summarized in the attorney general’s notice, includes the potential for significant daily penalties for violations, which underscores that Michigan is treating the case as more than a procedural dispute.
How this fits into the broader prediction market legal fight
Michigan’s latest order adds to a series of legal battles in the US involving prediction market platforms such as Kalshi and Polymarket. In many of these cases, state regulators argue the products function like regulated gambling—particularly sports wagering—while the companies and other opponents often argue prediction markets fall under federal oversight frameworks.
Nessel filed the Michigan lawsuit against Kalshi in March, asserting that the platform’s event contracts run afoul of state sports gambling rules. The new preliminary injunction is the most recent step in that enforcement effort.
Notably, the Michigan court’s action follows a June restraining order that barred Kalshi from offering sports betting to Michigan residents. That earlier development triggered a direct conflict between state and federal regulators: the US Commodity Futures Trading Commission (CFTC) ordered Kalshi not to comply with the state order and to keep operating.
Kalshi characterized the CFTC’s response as creating an “impossible position,” according to earlier reporting, highlighting the practical problem that emerges when state courts and federal agencies issue competing instructions.
Cointelegraph reached out to Kalshi for comment but did not receive an immediate response.
New Jersey pushes for Supreme Court review
While Michigan moved forward with its preliminary injunction, New Jersey officials announced the same day that they filed a petition seeking a writ of certiorari from the US Supreme Court. The petition centers on the state’s case against Kalshi and the question of whether federal regulators (through the CFTC) or state authorities have jurisdiction over prediction market offerings.
If the Supreme Court agrees to hear the matter, the ruling could help resolve competing legal theories that have emerged across different states—particularly the extent to which event contracts are treated as subject to federal regulation versus state gambling rules.
Melinda Roth, a visiting professor of practice at New England Law in Boston, told Cointelegraph she could see the Supreme Court taking the case, though she suggested the justices might also wait to address issues on the merits rather than procedural questions like whether a preliminary injunction should be granted. Roth also argued that the Supreme Court may act sooner rather than later given the ongoing litigation in the area.
“If and when SCOTUS takes it up, then this will likely decide whether sports event contracts are federally regulated by the CFTC or the states have the right to ban and/or regulate them as they see appropriate. I say ‘likely’ because Congress might actually act too. They could act before a SCOTUS review, or even after too.”
Legislative proposals aim to separate prediction markets from sports betting
In addition to court-driven outcomes, some US lawmakers are attempting to address the underlying policy dispute through legislation. Earlier coverage noted proposals aimed at limiting the use of insider information in event contracts.
In March, Senators Adam Schiff and John Curtis introduced a bipartisan bill that, as described in reporting, would prohibit CFTC-registered platforms from listing any event contract that “resembles a sports bet or casino-style game,” shifting the authority for regulation to individual states.
The same tension that shows up in Michigan and New Jersey—federal versus state control—appears in these legislative efforts. If enacted, such measures could reduce uncertainty by drawing clearer lines about which prediction market products are treated as sports wagering versus other forms of event-based trading.
At the moment, however, the fate of the sector remains tied to how courts reconcile these jurisdictional questions, and how lawmakers choose to intervene.
For market participants, the immediate watchpoints are straightforward: whether Kalshi appeals or seeks further relief in Michigan, how New Jersey’s Supreme Court petition progresses, and whether Congress advances reforms that could change the regulatory map before the courts fully resolve the issue. Until then, overlapping state enforcement and federal oversight continue to create the kind of uncertainty that can quickly reshape access to event contracts.
