A Michigan court has ruled that Kalshi, a prediction market operator, must cease its sports betting operations within the state. The order, issued by Ingham County Circuit Court Judge Rosemarie E. Aquilina, comes with significant penalties, potentially reaching $500,000 per day for any non-compliance. This preliminary injunction stems from a lawsuit by Michigan Attorney General Dana Nessel, who accused Kalshi of running illegal sports betting markets.
This injunction extends a temporary restraining order that was initially implemented in June and will remain effective until the court delivers a final decision. The ruling reflects concerns over the potential dangers faced by Michigan residents, particularly vulnerable populations, due to Kalshi's sports wagering offerings. Notably, while residents must be at least 21 years old to participate in such activities, Kalshi allows users as young as 18 to engage in betting.
The court's order emphasized that Kalshi is exploiting significant mental health challenges among users and failing to provide adequate protections associated with Michigan's regulatory framework. The injunction specifically prohibits Kalshi from providing or executing sports contracts in Michigan and bans any deposits, account management, or advertising related to these services through various platforms, including websites, apps, and social media.
Additionally, Kalshi is required to work with a licensed third-party geolocation service from the Michigan Gaming Control Board to enforce access restrictions effectively. Should Kalshi fail to comply with geofencing standards set by the court, they risk incurring a daily fine of $500,000 for each day of non-compliance.
