Michigan blocks Kalshi sports bets with $120,000 daily fine

A Michigan judge on Monday temporarily blocked Kalshi from offering sports betting contracts to state residents, imposing a $120,000 daily fine for non-compliance as the legal battle over prediction market jurisdiction intensifies.

Ingham County Circuit Court Judge Rosemarie Aquilina issued a 14-day temporary restraining order against the prediction market platform, ruling that Michigan residents would suffer "irreparable harm" from being "exploited by Kalshi's sports betting operation masquerading as an investment opportunity," according to a court filing dated June 29. The order expires July 13.

Michigan is the second US state to secure a court-ordered ban on Kalshi's sports event contracts, following Nevada's temporary ban in March. On June 17, Kentucky sued five prediction market platforms — including Kalshi and Polymarket — accusing them of operating unlicensed sports betting operations. More than a dozen other states have taken similar legal action against prediction market operators.

The state-level crackdown has triggered a jurisdictional counteroffensive from the Commodity Futures Trading Commission, which has sued several states arguing that federally regulated event contracts fall under its exclusive authority. The conflicting legal positions create uncertainty for Kalshi and its competitors as sports betting volume surges during the FIFA World Cup.

World Cup betting fuels record prediction market volume

Daily taker volume across prediction markets reached a record $713 million on June 20, more than a week after the World Cup started on June 11, according to Dune data. Monthly sports betting volume on Kalshi rose 40% to $9.5 billion, while Polymarket saw a 175% increase to $5.3 billion, Defirate data shows.

The World Cup winner contract alone has generated more than $3.5 billion in trading volume on Polymarket, according to platform data. A June 11 Bernstein report predicted the 2026 FIFA World Cup would generate more than $3 billion in incremental sports betting handle and between $5 billion and $10 billion in additional consumer prediction market volume.

The surge in betting activity has also served as an onboarding channel for cryptocurrency users. About 60% of World Cup bettors interacted with a blockchain for the first time during their prediction market entry, according to a Bitget Wallet study of 857,000 users shared with Cointelegraph.

Kalshi has not publicly commented on how it will respond to the Michigan ruling. The company was reportedly in early IPO talks with investment banks, according to a separate report.

This article is for informational purposes only and does not constitute investment advice.