Kalshi’s legal battle with the Michigan Attorney General will end up in the Supreme Court, says a corporate lawyer, after a judge hit the prediction market player with a temporary restraining order.
Ingham County Circuit Court Judge Rosemarie Aquilina ruled in favor of Michigan AG Dana Nessel in a hearing on June 29.
The judge ordered Kalshi to stop offering sports-related contracts in Michigan. Failure to comply would result in a $120,000-per-day fine, said Aquilina.
Kalshi said it would comply, but added that it intends to fight the decision in court, Reuters reported.
“I genuinely think this is going to end up in SCOTUS,” the US-based securities and corporate lawyer Ariel Givner wrote on X.
Doug Mishkin, a partner at the US law firm Bryan Cave Leighton Paisner, told CasinoBeats the ruling was “notable.”
However, the legal expert said that the development “does not change [the] underlying issues, which remain very much unresolved across the country.”
Kalshi: Michigan Users Lose Access to Sports Contracts
Aquilina said that Kalshi must apply for a sports betting license if it wishes to continue offering contracts in the Great Lakes State.
The Kalshi legal team entered into a lengthy legal battle with the Michigan AG in March, when the latter sued the prediction market for violating state betting rules.
Kalshi hit back, claiming that only the federal regulators have the power to restrict it from operating in any particular area.
But the Aquilina ruling means that, for the time being at least, Kalshi must exclude all Michigan-based users from its sports contracts.
“The order temporarily halts Kalshi from engaging in or advertising its internet sports betting operation in Michigan while the lawsuit continues through the court system,” wrote Nessel in a press release.
Legal Saga Continues
The ruling is yet another chapter in the saga of Kalshi, Polymarket, and the Commodity Futures Trading Commission‘s battle against several states and tribal groups.
States insist that Kalshi and Polymarket offer unlicensed sports wagering services. The CFTC, however, says prediction market contracts are not wagers, but swaps.
The regulator has taken aim at AG offices that it says are imposing on its jurisdiction, filing lawsuits against nine states.
Lawmakers have waded into the fray, with 17 senators launching a bid to block the CFTC from using federal funds to finance its lawsuits.
Polymarket, meanwhile, launched a preemptive lawsuit against the Michigan AG in March. The firm said there was an “immediate and concrete” threat to its operations in the state.
The firm’s legal team said it was acting to “prevent imminent and irreparable harm arising from Michigan’s enforcement of state gambling laws against federally regulated derivatives exchanges.”
