Michigan court orders Kalshi to halt sports betting markets

A Michigan state court on Thursday issued a permanent injunction ordering Kalshi, the online exchange that lets users trade on future events, to stop offering sports prediction markets. The order, which follows a temporary restraining order issued in June, requires the company to block any sports‑related betting products. If Kalshi violates the injunction, the court said it can fine the firm $500,000 for each day of non‑compliance.

The ruling comes as Michigan has recently opened a legal sports‑betting market to boost state revenue. Kalshi’s platform is regulated by the U.S. Securities and Exchange Commission, which treats its markets as securities exchanges. State regulators argue that allowing sports betting on Kalshi would bypass Michigan’s licensing rules and undermine the state’s control over the industry. The court agreed that Kalshi’s sports markets would conflict with the Michigan Sports Betting Act, which requires all sports‑betting operators to be licensed by the state. Kalshi’s CEO had said the company wanted to test the waters with sports markets before seeking a state license, but the court said the firm must wait until it obtains proper approval.

The injunction carries a heavy penalty: a daily fine of $500,000 for any violation. Kalshi can appeal the decision to a higher court, but the company has not yet filed a formal appeal. If the firm does not comply, it could face a significant financial hit and potential criminal charges. The decision also signals to other exchanges that they must be careful about offering sports betting products in states with strict licensing regimes. For Michigan, the ruling reinforces the state’s control over its growing sports‑betting industry, which is expected to generate billions in revenue for public programs. The next steps for Kalshi will likely involve legal wrangling and a reassessment of its expansion strategy in regulated markets.