Michigan Bans Kalshi Sports Markets in New Battle Move

Michigan attorney general Dana Nessel has landed another blow on Kalshi by temporarily banned the exchange offering sports prediction markets.

The Michigan vs. Kalshi war has been ongoing since March when Nessel sued the prediction market giant. Nessel alleged the site was in breach of Michigan’s Lawful Sports Betting Act (LSBA).

Despite even President Trump weighing in on the argument this year, Michigan has – for now – got its way.

Kalshi Stopped from ‘Unlicensed Practices’, AG Says

In a strongly worded press release, the Michigan attorney general said that Kalshi offered sports betting “under the guise of trading event contracts”.

“My office will continue,” she added, “to defend Michiganders and enforce our gaming laws, which ensure gambling revenue is regulated and distributed back into our communities.”

Financial prediction markets are not included in the preliminary injunction. Therefore, traders in Flint, Detroit, or Grand Rapids can continue trading on the next U.S. president or winner of Big Brother.

However, Kalshi is now ordered to remove, or geofence, sports event contracts, from its platform in Michigan.

Michigan vs. Kalshi: A 2026 Timeline

• March 2026: Nessel files a lawsuit against Kalshi, alleging violation of the Lawful Sports Betting Act.
• March 2026: Kalshi tries to shift the case to a federal court.
• March: AG Nessel issues a Motion to Remand, sending the case back to the Ingham County Circuit Court.
• June 2026: A Michigan judge imposes a two-week temporary restraining order against Kalshi’s online sports markets.
• July 2026: Michigan increases penalties to $500,000 per day (after August 12) for Kalshi if it fails to geofence MI residents.
• July 2026: With Donald Trump’s backing, the CFTC directs Kalshi to honor sports event trades for its Michigan customers.
• September 2026: AG Nessel secures a second order stopping Kalshi sports contracts.

Second Restraining Order This Year

There have been some high-profile tussles between states and prediction markets this year. Connecticut has been waging its own war against the markets with a series of lawsuits and cease-and-desist campaigns.

However, nowhere has landed multiple banning orders like Michigan has.

The latest injunction against Kalshi follows one passed in the summer and imposes strict fines on the platform if it breaks the law. Kalshi will be fined $500,000 per day for violating the rules stopping Michigan residents from accessing its site.

Kalshi could get round the ban by getting a license from the Michigan Gaming Control Board. However, this is an easy ‘No’ buy (we’ll give it a 99% probability) as Kalshi is federally regulated by the CFTC.

Michigan Keen to Protect its Sports Betting Industry

Michigan has joined states with established sports betting industries, such as New Jersey and Nevada, in protecting its interests under current state laws.

The exponential growth of prediction exchanges is at the heart of the latest legal battle. Prediction markets are growing in popularity, public exposure, and valuation. Polymarket’s valuation was put at $21 billion this week following an investment push by Donald Trump Jr.

In addition, Kalshi is moving into sports sponsor deals, tying up with five MLB franchises this month. With federal backing from the CFTC, states like Michigan are going to have to head to the courts even more before a decision is made on who regulates these sites.

Kalshi say the CFTC has sole regulatory authority over prediction markets. However, the states argue only they can license online platforms offering sports markets. The battle rages on.