- Michigan successfully banned Kalshi from offering sports event contracts temporarily through a court order.
- The Commodity Futures Trading Commission (CFTC) is preventing Kalshi from complying by rejecting their emergency rules change.
- Michigan’s temporary restraining order against Kalshi got extended through August 12, where they would face $500k daily fines if not fully geofenced by then.
DETROIT – Kalshi has got themselves into quite a pickle, being forced to choose between violating state law or violating federal law based on recent developments. A Michigan court order prevented Kalshi from offering sport event contracts in the state, but the CFTC rejected an emergency rules change to comply with the order.
In a Tuesday release, the CFTC rejected Kalshi’s emergency rule proposal to cancel event contracts that were previously fulfilled for Michigan traders. In that same release, the CFTC “exercised its emergency authority to order KalshiEX, LLC to fulfill the open trades in accordance with its normal practices.”
That directly opposes the Michigan court order from June 29, which mandated a Kalshi geofencing for their sports event contracts that resemble Michigan sports betting. That temporary ban got extended by Ingham County Circuit Court Judge Rosemarie Aquilina, the same judge that issued the order initially on a two-week ban.
Kalshi Put In “Impossible Situation” With Conflicting Orders
With the Michigan court order requiring Kalshi to unwind trades, which contradicts federal regulatory obligations, the prediction market company is put in an “impossible situation”, according to Robert J. DeNault, Lawyer and Head of Enforcement at Kalshi.
We are disappointed by this decision and believe it is unfair to Kalshi. We already acted and unwound the trades, as the Michigan court order required us to do.
We are being put in an impossible position, looking to follow state court orders that may contradict our federal… https://t.co/M81qNaOzCY— robertjdenault (@robertjdenault) July 14, 2026
As the lawsuit stands, Kalshi must successfully geofence Michigan from sports event contracts by August 12, 2026. The state ruled that these contracts aren’t legal sports betting and circumvent Michigan gambling laws with unlicensed offerings. If the company fails to comply with the geofencing mandate, it faces steep fines of $500,000 per day starting August 13.
