By Elena Durnbaugh
Gongwer News Service
The prediction market platform Kalshi will be barred from operating in Michigan for the duration of a temporary restraining order granted in the Ingham Circuit Court to Attorney General Dana Nessel on Monday, the latest development in a lawsuit brought by the state in hopes of bringing prediction markets into compliance with Michigan’s sports betting laws.
The TRO was granted by Judge Rosemarie Aquilina and is effective for 14 days, prohibiting Kalshi and anyone acting on its behalf from “offering, advertising or facilitating internet sports betting to any person located in Michigan” and requires the company to implement state-compliant geolocation technology to ensure Michiganders are not making wagers on the platform during the TRO’s duration.
Aquilina’s decision to grant injunctive relief, if only temporarily, came as a win for Nessel’s team not long after the lawsuit was nearly moved out of state court and to the federal level, where Kalshi attempted to have the suit moved but was halted by a granted motion to remand.
“Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences. I am proud of the attorneys in my office who not only kept this case in state court but also secured an order protecting residents as this litigation moves forward,” Nessel said in a statement. “We remain committed to enforcing a level playing field for all gambling platforms in Michigan and ensuring that companies cannot evade accountability or exploit consumers under the guise of a prediction market.”
Nessel alleges in the suit that Kalshi violated Michigan’s Lawful Sports Betting Act by offering an online operation allowing Michigan residents to engage in sports betting “under the guise of trading event contracts.” Through enabling users to place wagers on the likelihood of sports-related outcomes, conducting transactions through widely used financial systems and participating in what the lawsuit alleges constitutes unlicensed gambling activity, Nessel contended Kalshi conducts business in Michigan without the licensing approval of the Michigan Gaming Control Board and in violation of the Lawful Sports Betting Act.
After the lawsuit was filed in state court, Kalshi attempted to move the case to the U.S. District Court for the Western District of Michigan. Nessel then filed a motion to remand, which was granted, sending the lawsuit back to the Ingham Circuit Court.
Michigan Gaming Control Board Executive Director Henry Williams issued a statement agreeing with Nessel on Tuesday and celebrating the court’s decision.
“Kalshi is targeting Michigan’s most vulnerable residents with sports betting dressed up as investing – and without intervention, the harm will keep getting worse,” Williams said in a statement. “Our licensed sportsbooks follow strict rules designed to protect consumers – verifying that bettors are at least 21 years old, offering responsible-gaming tools and protecting patron funds. Kalshi has refused to play by the same rules, and our agency will continue to use every regulatory and legal tool available to make sure Michigan families, our schools and our first responders are protected from this unchecked exploitation.”
Williams noted that revenue raised from sports betting is used to support Michigan’s public schools, the Compulsive Gaming Prevention Fund, First Responder Presumed Coverage Fund and the Michigan Strategic Fund. Kalshi, which has become one of the world’s fastest growing prediction market sites and a platform upon which millions of dollars trade hands each day, is currently exempt from those taxes and does not, Williams said, contribute positively to the state it operates in.
The company, though, disagrees. Communications Director Elisabeth Diana said in a statement that Kalshi intends to fight the TRO and future injunctory actions by the Ingham court, arguing Kalshi is not subject to the laws of the states in which it operates unless such a federal law also exists.
“It’s no surprise that we disagree with the state’s decision and will fight it in court. Kalshi is subject to exclusive federal jurisdiction,” Diana said. “We won’t be bullied by interests that care more about protecting their monopolies than their consumers. In the meantime, we’re implementing restrictions.”
The lawsuit against Kalshi is part of a larger attempt by Nessel’s office to use its final months in office to take on tech giants and the gambling industry that’s become ubiquitous since the widespread legalization of sports betting. Earlier this month, U.S. District Court Judge Paul Maloney denied requests by Kalshi’s peers Polymarket and Robinhood for preliminary injunctions that would have blocked Michigan from enforcing its gambling laws against their sports-related prediction contracts, rejecting their arguments that such products are exempt federal “swaps” beyond the State’s reach. No operator may sidestep the state’s consumer protections simply by rebranding a sports bet as an “event contract.”
Williams panned the company’s claims and said marketing Kalshi’s product as “event contracts” and not in any way a sports betting product is simply a distraction from the functional reality of how the platform functions: to place bets and gamble on many events or scenarios, many of which are related to sports.
“The MGCB exists to ensure fair and honest gaming for the people of the state, and that mission does not stop at the border of a company’s marketing materials,” Williams said. “Whether Kalshi calls its product an ‘event contract’ or a ‘trade,’ it’s a sports wager being offered to Michigan residents without a license and without the consumer protections our state requires.”
Gongwer News Service
The prediction market platform Kalshi will be barred from operating in Michigan for the duration of a temporary restraining order granted in the Ingham Circuit Court to Attorney General Dana Nessel on Monday, the latest development in a lawsuit brought by the state in hopes of bringing prediction markets into compliance with Michigan’s sports betting laws.
The TRO was granted by Judge Rosemarie Aquilina and is effective for 14 days, prohibiting Kalshi and anyone acting on its behalf from “offering, advertising or facilitating internet sports betting to any person located in Michigan” and requires the company to implement state-compliant geolocation technology to ensure Michiganders are not making wagers on the platform during the TRO’s duration.
Aquilina’s decision to grant injunctive relief, if only temporarily, came as a win for Nessel’s team not long after the lawsuit was nearly moved out of state court and to the federal level, where Kalshi attempted to have the suit moved but was halted by a granted motion to remand.
“Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences. I am proud of the attorneys in my office who not only kept this case in state court but also secured an order protecting residents as this litigation moves forward,” Nessel said in a statement. “We remain committed to enforcing a level playing field for all gambling platforms in Michigan and ensuring that companies cannot evade accountability or exploit consumers under the guise of a prediction market.”
Nessel alleges in the suit that Kalshi violated Michigan’s Lawful Sports Betting Act by offering an online operation allowing Michigan residents to engage in sports betting “under the guise of trading event contracts.” Through enabling users to place wagers on the likelihood of sports-related outcomes, conducting transactions through widely used financial systems and participating in what the lawsuit alleges constitutes unlicensed gambling activity, Nessel contended Kalshi conducts business in Michigan without the licensing approval of the Michigan Gaming Control Board and in violation of the Lawful Sports Betting Act.
After the lawsuit was filed in state court, Kalshi attempted to move the case to the U.S. District Court for the Western District of Michigan. Nessel then filed a motion to remand, which was granted, sending the lawsuit back to the Ingham Circuit Court.
Michigan Gaming Control Board Executive Director Henry Williams issued a statement agreeing with Nessel on Tuesday and celebrating the court’s decision.
“Kalshi is targeting Michigan’s most vulnerable residents with sports betting dressed up as investing – and without intervention, the harm will keep getting worse,” Williams said in a statement. “Our licensed sportsbooks follow strict rules designed to protect consumers – verifying that bettors are at least 21 years old, offering responsible-gaming tools and protecting patron funds. Kalshi has refused to play by the same rules, and our agency will continue to use every regulatory and legal tool available to make sure Michigan families, our schools and our first responders are protected from this unchecked exploitation.”
Williams noted that revenue raised from sports betting is used to support Michigan’s public schools, the Compulsive Gaming Prevention Fund, First Responder Presumed Coverage Fund and the Michigan Strategic Fund. Kalshi, which has become one of the world’s fastest growing prediction market sites and a platform upon which millions of dollars trade hands each day, is currently exempt from those taxes and does not, Williams said, contribute positively to the state it operates in.
The company, though, disagrees. Communications Director Elisabeth Diana said in a statement that Kalshi intends to fight the TRO and future injunctory actions by the Ingham court, arguing Kalshi is not subject to the laws of the states in which it operates unless such a federal law also exists.
“It’s no surprise that we disagree with the state’s decision and will fight it in court. Kalshi is subject to exclusive federal jurisdiction,” Diana said. “We won’t be bullied by interests that care more about protecting their monopolies than their consumers. In the meantime, we’re implementing restrictions.”
The lawsuit against Kalshi is part of a larger attempt by Nessel’s office to use its final months in office to take on tech giants and the gambling industry that’s become ubiquitous since the widespread legalization of sports betting. Earlier this month, U.S. District Court Judge Paul Maloney denied requests by Kalshi’s peers Polymarket and Robinhood for preliminary injunctions that would have blocked Michigan from enforcing its gambling laws against their sports-related prediction contracts, rejecting their arguments that such products are exempt federal “swaps” beyond the State’s reach. No operator may sidestep the state’s consumer protections simply by rebranding a sports bet as an “event contract.”
Williams panned the company’s claims and said marketing Kalshi’s product as “event contracts” and not in any way a sports betting product is simply a distraction from the functional reality of how the platform functions: to place bets and gamble on many events or scenarios, many of which are related to sports.
“The MGCB exists to ensure fair and honest gaming for the people of the state, and that mission does not stop at the border of a company’s marketing materials,” Williams said. “Whether Kalshi calls its product an ‘event contract’ or a ‘trade,’ it’s a sports wager being offered to Michigan residents without a license and without the consumer protections our state requires.”
––––––––––––––––––––
Subscribe to the Legal News!
https://legalnews.com/Home/Subscription
Full access to public notices, articles, columns, archives, statistics, calendar and more
Day Pass Only $4.95!
One-County $80/year
Three-County & Full Pass also available
