Michigan Court Orders Kalshi to Stop Sports Event Contracts
A Michigan court granted the state’s request for a temporary restraining order against Kalshi over its sports event contracts on Monday.
The order bars Kalshi from offering sports events contracts in the state without a sports betting license and requires it to use a licensed third-party geolocation provider to comply. Kalshi would have to pay $120,000 for each day it doesn’t comply with the order moving forward.
It was not immediately clear how Kalshi would respond to the order, but it appears it could appeal for emergency relief.
The state’s attorney general sued Kalshi in March. From a press release at the time:
Michigan Attorney General Dana Nessel has filed a lawsuit (PDF) against KalshiEx, LLC (Kalshi), alleging the derivatives exchange and prediction market company violated Michigan’s Lawful Sports Betting Act (LSBA). The lawsuit, filed in the Ingham County Circuit Court on behalf of the People of the State of Michigan and the Michigan Gaming Control Board, seeks an order of abatement and injunctive relief to halt what the Attorney General contends is the unlawful offering of online sports wagers to Michigan residents. …
“Corporations cannot circumvent state gaming laws,” said Attorney General Nessel. “My office will hold those who sidestep Michigan’s consumer protections accountable and ensure that betting in our state remains lawful, fair and subject to the oversight our residents expect and deserve.”
Some of the language from Monday’s order:
IT IS ORDERED that Defendant KalshiEX, LLC (“Kalshi”), and its officers, agents, employees, attorneys, successor and assigns, and all other persons and entities who receive actual notice of the Order Granting a Temporary Restraining Order, whether acting individually or in active concert or participation with Defendant, directly or indirectly, through any corporation, trust or other device (including, without limitation, through any entities affiliated with or created by an owner of the Defendant), are hereby enjoined from engaging in any activity in connection with sports wagering in the State of Michigan, including the following conduct…
In order to comply with this order, Defendant shall utilize a third-party geolocation services provider licensed by the State of Michigan Gaming Control Board capable of ensuring compliance with the geofencing specifications of the Michigan Gaming Control Board Technical Bulletin No. 2024-03. Defendant may propose a third-party geolocation services provider that is licensed by a gaming regulator of another state, and the Court may determine whether such third-party is capable of ensuring compliance with the geofencing specifications of the Michigan Gaming Control Board Technical Bulletin No. 2024-03.
Given that Defendant’s failure to adequately geolocate may limit Plaintiff’s ability to identify ill-gotten gains for the purpose of disgorgement, Defendant shall pay a fine of $120,000 per day¹ for each day that it does not comply with the geolocation requirements of this order.
The order is supposed to be in effect for 14 days, until July 13.