A Michigan court has issued a 14-day temporary restraining order against prediction market platform Kalshi, barring it from offering sports-related event contracts in the state until at least July 13. The order, signed by Ingham County Circuit Court Judge Rosemarie E. Aquilina, threatens penalties of up to $120,000 per day if the company fails to comply with court-mandated geo-fencing requirements, according to Attorney General Dana Nessel.
State officials argue that Kalshi violated Michigan’s Lawful Sports Betting Act by offering what they describe as unlicensed gambling products under the label of event contracts. The court accepted the state’s position that the activity could cause immediate harm by bypassing Michigan’s regulated betting framework, including age restrictions requiring participants to be 21 or older.
Michigan court blocks Kalshi sports contracts
Legal battle returns to state court
The restraining order follows a procedural win for Michigan after a federal court sent the case back to state jurisdiction. Kalshi had sought to move the lawsuit to federal court, but the Western District of Michigan ruled in favor of Nessel’s motion to keep the case at the state level.
The lawsuit, originally filed in March, claims the platform has been operating unlawfully within Michigan. Kalshi has signaled it will challenge the decision, maintaining that its contracts fall under federal oversight rather than state gambling laws.
National dispute over regulation intensifies
Michigan’s action is part of a broader conflict across the United States over who regulates prediction markets. More than a dozen states have taken enforcement steps against Kalshi, Polymarket US, and similar platforms, alleging they are offering unauthorized sports betting products.
At the center of the dispute is the Commodity Futures Trading Commission, which argues that event contracts qualify as derivatives and fall under federal jurisdiction. The agency has supported platforms like Kalshi in ongoing legal challenges, asserting that state-level restrictions conflict with federal authority.
Courts have so far delivered mixed rulings, creating an uneven regulatory landscape that varies by state and increases the likelihood of a higher court review.
Trading volumes surge despite legal pressure
The legal uncertainty has not slowed trading activity. Kalshi has reported rapid growth, with monthly trading volume climbing above $30 billion in June, marking a 79% increase from May. Activity has been fueled in part by global sporting events, including the 2026 World Cup.
Polymarket has also recorded rising volumes, surpassing $5 billion in football-related markets during the early weeks of the tournament. Despite this growth, Kalshi has widened its lead over competitors in recent months.
What comes next
The temporary restraining order is set to expire on July 13, but the case is expected to continue. Based on prior legal patterns, Michigan could seek a preliminary injunction to extend restrictions while the lawsuit proceeds.
For now, the ruling adds to a patchwork regulatory environment across the country, leaving traders navigating conflicting state and federal positions on prediction markets.
Curious how regulation could reshape these markets? See why 2026 may redefine prediction markets in this analysis.
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