Michigan court blocks Kalshi as Supreme Court battle over prediction markets nears

Michigan court issues preliminary injunction against Kalshi

A Michigan state court has ordered a preliminary injunction against Kalshi, a prediction markets platform, blocking it from offering event contracts to residents. Michigan Attorney General Dana Nessel announced the decision on September 2, stating that the platform was operating as unlicensed sports betting "masquerading as an investment opportunity." The court order allows for fines of up to $500,000 per day if Kalshi violates the injunction. This follows a June restraining order from the same court, which the U.S. Commodity Futures Trading Commission (CFTC) later directed Kalshi to ignore, creating what the company called an "impossible position."

New Jersey seeks Supreme Court review

On the same day, New Jersey officials filed a petition asking the U.S. Supreme Court to review its case against Kalshi. The petition, called a writ of certiorari, could resolve conflicting legal theories about whether the CFTC or state authorities have jurisdiction over prediction markets. Legal experts suggest the Court may eventually take up the issue, though it could wait for lower courts to rule on the merits first.

Ongoing legal and regulatory disputes

The Michigan lawsuit, filed in March, alleges that Kalshi violated state sports gambling laws. Similar legal battles are unfolding in other states, with platforms like Polymarket also facing scrutiny. Meanwhile, some U.S. lawmakers have proposed bills to address concerns about insider trading on prediction market platforms, including a measure to ban event contracts that resemble sports bets or casino-style games.

What is confirmed

- Michigan’s Circuit Court for the 30th Judicial Circuit issued a preliminary injunction against Kalshi on September 2, 2026. - The injunction blocks Kalshi from offering event contracts to Michigan residents, with potential fines of $500,000 per day for violations. - Michigan’s attorney general alleges Kalshi is operating as unlicensed sports betting. - New Jersey filed a petition with the U.S. Supreme Court to review jurisdiction over prediction markets. - The CFTC previously ordered Kalshi to ignore Michigan’s June restraining order, which Kalshi described as creating an "impossible position."

Why this matters

The legal conflict highlights a growing dispute between federal and state authorities over who regulates prediction markets, which allow users to bet on the outcome of real-world events. A Supreme Court decision could clarify whether these platforms fall under federal oversight by the CFTC or state gambling laws.

Sources

• Cointelegraph