A Michigan court has issued an order prohibiting prediction market operator Kalshi from offering sports betting markets within the state, with potential penalties reaching $500,000 per day for non-compliance. The preliminary injunction was granted by Ingham County Circuit Court Judge Rosemarie E. Aquilina in response to a lawsuit from Michigan Attorney General Dana Nessel, who accused Kalshi of running illegal sports betting operations.
This ruling extends a temporary restraining order that was put in place in June and will remain effective until a final ruling is issued. The court expressed concerns that Kalshi's ongoing activities could harm Michigan residents, particularly the vulnerable, noting that participants must be at least 21 years old in Michigan, while Kalshi allows participation from individuals as young as 18.
According to the court, Kalshi "takes advantage of serious mental health issues without providing the protections that Michigan’s regulatory structure was designed to do" and avoids the extensive patron protection mechanisms afforded by state regulations.
The injunction specifically bars Kalshi from offering or executing any sports contracts to individuals based in Michigan. The company is prohibited from facilitating deposits, managing accounts, or advertising through various channels, including websites, apps, emails, and social media.
Additionally, Kalshi is mandated to employ a third-party geolocation service licensed by the Michigan Gaming Control Board to ensure compliance and prevent local residents from accessing restricted markets. Should the court determine that Kalshi does not adhere to the necessary geofencing requirements, the company could incur fines of $500,000 for each day of non-compliance.
