Kalshi must continue blocking Michigan residents from trading sports-related event contracts after an Ingham County Circuit Court judge issued a preliminary injunction that will remain effective while the state’s lawsuit proceeds.
Judge Rosemarie E. Aquilina signed the order Tuesday, extending restrictions first imposed through a temporary restraining order in June. The decision gives Michigan Attorney General Dana Nessel’s office a significant interim victory in its effort to stop the prediction-market platform from offering sports contracts to people located in the state.
Under the order, Kalshi must use a third-party geolocation provider licensed by the Michigan Gaming Control Board and comply with the regulator’s geofencing requirements. A violation can bring a civil penalty of $500,000 per day, according to the court filing.
The ruling places operational pressure on platforms that offer sports-linked prediction contracts while arguing that their products fall under federal commodities oversight rather than state betting rules. In Michigan, the court has required Kalshi to adopt the same type of location-control framework commonly used by licensed online gambling operators.
Court keeps June restrictions in force
Michigan filed its lawsuit against Kalshi in March, alleging that sports-related event contracts offered to state residents violate Michigan gambling law. Kalshi’s contracts allow users to take positions on the outcome of events, including sports contests, with payouts determined by whether a specified result occurs.
The preliminary injunction replaces the earlier temporary restraining order rather than resolving the case on its merits. Michigan must still prove its claims in the underlying litigation, while Kalshi retains the opportunity to challenge the state’s legal theory and the scope of the restrictions.
Aquilina’s latest order sharply raises the potential daily cost of noncompliance. The June restraining order carried a penalty of $120,000 per day, based on the materials provided. The new $500,000 daily sanction gives the geolocation requirement far more force than a standard request to remove a product from a website.
Nessel referred to the injunction in a statement released Wednesday, one day after Aquilina signed the order. The attorney general’s office has argued that Michigan can enforce its gaming laws against sports contracts offered within state borders, regardless of the platform’s federal regulatory arguments.
The dispute had briefly moved to federal court after Kalshi attempted to remove the case from Michigan’s state judicial system. The U.S. District Court for the Western District of Michigan granted the state’s request to remand the matter, returning it to Ingham County Circuit Court.
That procedural result matters for the immediate case because Aquilina’s court, rather than a federal judge, is now supervising the injunction and any penalties tied to its enforcement.
Geolocation becomes a central compliance test
The order focuses on where a user is physically located when seeking to access a sports contract, not simply on the address associated with an account. Geolocation systems typically assess location through signals such as GPS, Wi-Fi networks, mobile connections and IP addresses. Gaming regulators use them to prevent users from accessing state-specific services across state lines.
Kalshi’s requirement to use a Michigan-licensed vendor creates a defined compliance route, but it also means the company cannot rely solely on its own internal location checks if it wishes to serve users under the court’s conditions. Platforms facing similar disputes elsewhere could encounter comparable demands for independently approved location controls.
For Michigan users, the practical effect is that access to sports-related contracts should remain unavailable while the injunction is active. The ruling does not establish that every Kalshi product must be inaccessible in Michigan; its focus is on sports-related event contracts. The distinction could become increasingly relevant as prediction platforms offer contracts tied to economic data, politics, entertainment and other non-sports events.
Users with open positions or account balances should consult Kalshi’s own contract and withdrawal terms rather than assume that a geographic restriction automatically closes a position or prevents withdrawals. Court-ordered access restrictions can affect how users manage contracts, particularly where settlement dates fall after a state-level block takes effect.
Michigan joins a growing state campaign
Michigan is among more than a dozen states that have taken enforcement action, issued warnings or filed lawsuits over sports-related prediction contracts, according to the information supplied. Connecticut filed suit last week seeking to block the offering of sports contracts, adding another court challenge to a dispute that has expanded across state regulators, gaming agencies and the prediction-market sector.
States contend that contracts tied to sports outcomes resemble wagering products and should be subject to licensing, consumer-protection rules and other requirements applied to sportsbooks. Prediction-market companies have maintained that their products are event contracts governed under federal commodities laws.
The Michigan injunction does not settle that broader legal conflict. It does show that state authorities can obtain immediate restrictions through state courts while the jurisdictional questions are litigated. That approach creates a patchwork risk for platforms: a contract available in one location may be blocked, restricted or challenged in another.
The supplied August trading figures underscore why the dispute has drawn attention. Kalshi reportedly recorded $38.67 billion in volume during the month, compared with a combined $8.41 billion for Polymarket and Polymarket US. Trading volume is not equivalent to revenue or deposits, but the figures indicate that event-contract markets have grown large enough to attract more intense scrutiny from gaming authorities.
A $500,000 daily penalty also gives Michigan a strong enforcement mechanism if the court determines that Kalshi’s geofencing falls short. The company now faces a choice familiar to online gambling and financial platforms operating across fragmented U.S. rules: build state-specific controls quickly or risk injunctions that can disrupt access and create substantial legal costs.
As the Michigan case moves toward a final ruling, the immediate precedent is operational rather than definitive. A state court has required a federally oriented event-contract platform to block sports trading within Michigan using regulator-approved geolocation technology, and it has attached a penalty large enough to make compliance difficult to treat as optional.
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