A Michigan court has issued an order preventing prediction market operator Kalshi from offering sports betting markets in the state, subjecting the company to potential penalties of up to $500,000 for each day it fails to comply. The ruling came from Ingham County Circuit Court Judge Rosemarie E. Aquilina, following a lawsuit initiated by Michigan Attorney General Dana Nessel, who argued that Kalshi has been operating illegal sports betting markets.
This latest ruling extends a temporary restraining order that had been put in place in June and will remain active until a final ruling is established. The court cited concerns that Kalshi's ongoing operations pose a risk to the residents of Michigan, highlighting that while state regulations require participants in sports wagering to be at least 21 years old, Kalshi allows individuals as young as 18 to engage in these markets.
The order criticizes Kalshi for exploiting serious mental health issues and lacking the safeguards that Michigan’s regulatory framework is intended to provide. "Kalshi takes advantage of serious mental health issues without providing the protections that Michigan’s regulatory structure was designed to do," the court stated. Furthermore, the injunction underscores that Kalshi bypasses the detailed patron protection mechanisms established within Michigan’s regulations.
As part of the injunction, Kalshi is barred from offering or executing any contracts related to sports betting for individuals located in Michigan. The company cannot accept deposits, conduct account operations, or engage in any advertising through websites, apps, emails, social media, or bloggers.
To comply with the court's order, Kalshi must work with a licensed third-party geolocation service from the Michigan Gaming Control Board to ensure that residents cannot access prohibited markets. If the court determines that Kalshi does not adhere to the mandated geofencing requirements, the company could incur fines of $500,000 for each day it remains non-compliant.
