Michigan Court Bars Kalshi in State as New Jersey Seeks Supreme Court Review

A Michigan state court issued a preliminary injunction blocking prediction-market platform Kalshi from offering services in the state. The same day, New Jersey asked the U.S. Supreme Court to decide whether prediction-market oversight belongs to the federal government or the states.

Cointelegraph reported on September 3 that the 30th Circuit Court in Ingham County, Michigan, approved a preliminary injunction barring Kalshi from offering event contracts to Michigan residents. Violations could bring fines of as much as $500,000 a day.

Michigan Attorney General Dana Nessel criticized Kalshi for effectively operating a gaming business without state approval. She said the move would strengthen protections for residents.

The ruling follows a temporary restraining order issued in June. At the time, the Commodity Futures Trading Commission issued guidance to Kalshi that conflicted with the state court order. Kalshi argued that the conflict between federal and state rules left it effectively unable to comply with both at once.

The jurisdictional dispute may also head to the U.S. Supreme Court. New Jersey filed a petition the same day asking the court to hear a case involving Kalshi.

If the Supreme Court takes the case, the central question will be whether the CFTC has exclusive authority over prediction-market event contracts or whether individual states can ban or regulate them independently.

Melinda Rho, a visiting professor at New England Law School, said the Supreme Court is likely to address the issue eventually as related lawsuits continue in multiple jurisdictions. She said a key question may be whether sports event contracts fall under federal commodities regulation or state gambling and gaming rules.

Congress is also weighing the issue. In March, Sens. Adam Schiff and John Curtis introduced a bill that would bar CFTC-registered platforms from listing event contracts similar to sports betting or casino games.