Michigan Attorney General Dana Nessel has secured a preliminary injunction preventing Kalshi from offering online sports wagering contracts to users located in Michigan. The order requires the prediction market company to continue blocking access for Michigan residents through geofencing measures, with violations carrying a potential fine of $500,000 per day.

The injunction follows a lawsuit filed by Nessel in March, which alleges that Kalshi violated Michigan’s Lawful Sports Betting Act (LSBA) by providing sports-related contracts that function as wagers without approval from the Michigan Gaming Control Board. The Attorney General’s office argues that the company allows users to speculate on sports outcomes through event contracts while operating outside the state’s regulated gambling framework.

“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,” said Attorney General Nessel in a press release. “My office will continue to defend Michiganders and enforce our gaming laws, which ensure gambling revenue is regulated and distributed back into our communities.”

The preliminary injunction replaces a temporary restraining order issued in June, which had already restricted Kalshi from offering or promoting its sports betting operations in Michigan. The court order will remain active until a final judgment is issued in the case.

Court Requires Kalshi To Maintain Michigan Blocking Measures

The ruling requires Kalshi to prevent Michigan-based users from accessing sports event contracts through geolocation controls. The company must use a third-party geolocation provider licensed by the Michigan Gaming Control Board and capable of meeting the board’s technical requirements.

The restrictions cover sports-related products that the court considers functionally similar to traditional online betting. These include moneyline contracts, parlay-style contracts, in-game markets and proposition-based contracts.

The injunction also prevents Kalshi from accepting deposits from Michigan residents, creating accounts for users located in the state, or promoting these products through advertising channels such as applications, push notifications, influencers, affiliates or paid placements.

The case began after Nessel claimed Kalshi’s platform allowed Michigan residents to participate in sports betting through financial-style contracts. Her office argued that the company offered these products without the licensing required under state gambling laws.

Kalshi attempted to transfer the lawsuit from Michigan state court to the U.S. District Court for the Western District of Michigan. Nessel challenged that move, and the case was returned to the Ingham County Circuit Court after her motion to remand was granted.

Legal Dispute Over Prediction Markets Continues

Michigan’s action against Kalshi forms part of a wider dispute between prediction market operators and state gambling regulators over whether sports-related event contracts fall under state gaming laws or federal financial regulation.

Judge Rosemarie Aquilina wrote that Michigan and vulnerable residents faced immediate harm from what she described as Kalshi’s “sports betting operation masquerading as an investment opportunity.”

The order noted that Michigan requires sports bettors to be at least 21 years old, while Kalshi’s platform allows users from age 18. The court also found that the company’s operations could avoid consumer protections connected with Michigan’s regulated gaming system, including funding mechanisms linked to gambling revenue.

Kalshi has argued that its contracts fall under federal oversight as financial products regulated by the Commodity Futures Trading Commission (CFTC). Similar legal disputes have developed in other states, with courts reaching different conclusions about the relationship between federal authority and state gambling regulation.