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Ingham County Circuit Court Judge Rosemarie Aquilina granted Attorney General Dana Nessel‘s request to immediately halt Kalshi‘s sports operations in Michigan.
It’s the second straight win for the state of Michigan against prediction markets, which offer sports-related contracts.
Michigan is arguing that the contracts are sports wagering, in which prediction markets are not tied to the same regulatory requirements as legal Michigan sportsbooks.
After notching a court win against Polymarket earlier this month, Michigan has been on the side of the regulators.
Nessel said in a statement:
“Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences.”
Judge cites age gap as key harm
Aquilina first noted in the document of the age gap between Kalshi’s requirements and legal operators in the state. Users on Kalshi’s platform can be as young as 18, while the regulated industry requires individuals to be 21.
Michigan Gaming Control Board (MGCB) Executive Director Henry Williams said residents are unprotected when using prediction markets.
“Our licensed sportsbooks follow strict rules designed to protect consumers – verifying that bettors are at least 21 years old, offering responsible gaming tools, and protecting patron funds. Kalshi has refused to play by the same rules, and our agency will continue to use every regulatory and legal tool available to make sure Michigan families, our schools, and our first responders are protected from this unchecked exploitation.”
The court order cited vulnerabilities Michigan citizens are currently facing and will continue to face down the road. It was ruled that “Kalshi’s sports betting operation” is “masquerading as an investment opportunity.”
Aquilina went on to write:
“If Kalshi is allowed to continue to offer sports wagers, the potential irreparable harm on Michigan’s youth would be profound.”
The judge cited several more harms, including the lack of consumer protections, failure to comply with Michigan law, and sidestepping tax revenue.
MGCB Executive Director Henry Williams also spoke to the requirements legal operators must adhere, and vowed to continue action against Kalshi:
“Our licensed sportsbooks follow strict rules designed to protect consumers — verifying that bettors are at least 21 years old, offering responsible-gaming tools, and protecting patron funds.
“Kalshi has refused to play by the same rules, and our agency will continue to use every regulatory and legal tool available to make sure Michigan families, our schools, and our first responders are protected from this unchecked exploitation.”
$120,000-a-day penalty for noncompliance
The order took effect immediately and runs through July 13. More litigation is expected following the order.
Kalshi is now required to utilize a third-party geolocation service provider licensed by the MGCB to ensure compliance. If Kalshi doesn’t comply, Aquilina laid out the punishments:
“Given that Defendant’s failure to adequately geolocate may limit Plaintiff’s ability to identify ill-gotten gains for the purpose of disgorgement, Defendant shall pay a fine of $120,000 per day for each day that it does not comply with the geolocation requirements of this order.”
How we got here
Nessel has been proactive against prediction markets, suing Kalshi in March. Polymarket followed with its own suit against the state shortly after, which resulted in another court win for Michigan.
So far, Michigan has won every court case, and has stopped both Polymarket and Kalshi from operating within the state.
US District Judge Paul L. Maloney ruled that the case is also going back to the state court, which is another victory for Michigan. Kalshi was pleading for a federal hearing, as its platform is federally regulated under the Commodity Futures Trading Commission (CFTC).
Maloney wrote:
“State courts are perfectly capable of handling defenses based in federal law.”
This means that Michigan players should stick with licensed sports operators, which are required to provide consumer protections for all aged-verified users. Many of them offer Michigan sports betting bonuses, too.
