Michigan Attorney General Dana Nessel has obtained a preliminary injunction against Kalshi, preventing the prediction market company from offering sports contracts in Michigan.
The injunction mandates Kalshi to maintain geofencing to block access to its sports contracts for Michigan residents and anyone within the state. Failure to comply could lead to a daily fine of $500,000.
“Kalshi has long tried to portray itself as a legitimate gaming entity in our state, and I am pleased that this order provides further protection for Michigan residents against its predatory, unlicensed practices,” stated Nessel. “My office will continue to advocate for Michiganders and enforce our gaming laws, which ensure that gambling revenue is regulated and reinvested in our communities.”
Nessel filed a lawsuit against Kalshi in March, claiming that the company violated Michigan’s Lawful Sports Betting Act (LSBA) by offering sports betting through event contracts without approval from the Michigan Gaming Control Board (MGCB).
According to the lawsuit, Kalshi operates an online platform that allows Michigan residents to wager on sports-related outcomes under the guise of trading event contracts. The Attorney General’s office alleges that this activity constitutes unlicensed gambling under Michigan law.
Kalshi later attempted to transfer the case from state court to the US District Court for the Western District of Michigan. Nessel requested a remand, which was granted, sending the lawsuit back to the Ingham County Circuit Court.
In June, an Ingham County judge ruled in favor of Michigan, issuing a temporary restraining order that prohibited Kalshi from offering sports-related contracts in the state pending the legal dispute. The restriction remained in place until mid-July.
In July, the MGCB terminated its affiliation with the National Council on Problem Gambling. This decision followed the organization’s acceptance of a $2 million partnership with Kalshi earlier in the year.
In a correspondence to the council, MGCB Executive Director Henry Williams questioned the consistency of Kalshi labeling its contracts as “investments” rather than gambling products, indicating potential conflicts with responsible gambling initiatives and causing consumer confusion regarding applicable safeguards.
Kalshi has expressed intention to contest the state’s case.
In July, the company disagreed with Michigan’s stance and pledged to defend itself in court, asserting its subject to exclusive federal jurisdiction.