A Michigan court has issued an order compelling Kalshi, a prediction market operator, to cease operations of its sports betting markets within the state. Should the company fail to comply, it faces potential penalties of up to $500,000 per day.
Ingham County Circuit Court Judge Rosemarie E. Aquilina granted a preliminary injunction following a lawsuit from Michigan Attorney General Dana Nessel. The lawsuit alleged that Kalshi has been running illegal sports betting markets.
This newly issued rule extends a temporary restraining order that was put in place in June and will remain active until a final ruling is rendered by the court.
The court emphasized that Kalshi's continued operations pose a threat to Michigan residents, particularly vulnerable individuals. It pointed out that Michigan’s legal framework mandates participants in sports betting to be at least 21 years old; however, Kalshi permits participation from individuals as young as 18.
The injunction criticized Kalshi for allegedly exploiting significant mental health issues while lacking the necessary protections that Michigan's regulatory environment is intended to provide. The order highlighted that the company is circumventing Michigan’s comprehensive patron protection measures.
Under the injunction, Kalshi is barred from offering or executing any sports contracts to individuals located in Michigan. Additionally, it cannot process deposits, manage accounts, or conduct advertising through websites, applications, emails, social media, or other forms of communication.
To enforce this ruling, Kalshi must engage a licensed third-party geolocation service that meets the standards set by the Michigan Gaming Control Board. Failure to adhere to these geofencing requirements could result in hefty fines of $500,000 for each day of non-compliance.
