Share 
A Michigan judge issued a preliminary injunction against Kalshi, which prevents the predictions market operator from offering sports-related event contracts in the state indefinitely.
The order extends and strengthens an emergency order in place since June and extended in August.
Higher fines after March lawsuit sets wheels in motion
The injunction, announced on Sept. 2 by Michigan Atty. Gen. Dana Nessel, requires Kalshi to block users from accessing sports contracts through a state-licensed geolocation provider. It also states that Kalshi “shall pay a fine of $500,000 per day for each day that the Court finds” that the company fails to meet this requirement, up from the initial $120,000 per day fine.
The ruling will remain in effect until there is a final order in the state’s lawsuit against Kalshi.
Back in March, Michigan sued Kalshi alleging the company offered unlicensed online sports betting in violation of the state’s Lawful Sports Betting Act. Kalshi’s contracts allow users to take positions on the outcomes of sporting events. State officials contend that those contracts function as sports wagers and should be subject to the same licensing, age verification, consumer protection and tax rules that apply to Michigan’s licensed sportsbooks.
“Corporations cannot circumvent state gaming laws,” Nessel said. “My office will hold those who sidestep Michigan’s consumer protections accountable and ensure that betting in our state remains lawful, fair and subject to the oversight our residents expect and deserve.”
Kalshi has rejected that characterization of its products. The company argues that its sports event contracts are federally regulated derivatives, not gambling products, and that the Commodity Futures Trading Commission has primary authority over its exchange.
Courts act in June when customers had open contracts
The court first granted the state a temporary restraining order on June 29. The emergency order temporarily barred Kalshi from offering or advertising sports contracts in Michigan while the court considered a longer injunction. It also required the company to use state-approved geolocation technology and carried the potential of a $120,000 per day penalty for noncompliance.
The June order created a complication involving open contracts held by Michigan users. Kalshi adopted an emergency rule that would have allowed it to forcefully liquidate certain outstanding sports event positions in order to comply with the court order. The CFTC attempted to block Kalshi from putting that rule into effect citing concerns that abruptly ending those trades could disrupt the market and interfere with contract settlement, but Kalshi had already canceled those orders.
