Michigan court blocks Kalshi from operating in state as New Jersey seeks Supreme Court review
An Ingham County Circuit Court judge has blocked prediction-market platform Kalshi from operating in Michigan, threatening a $500,000 daily fine for non-compliance. Concurrently, New Jersey has petitioned the U.S. Supreme Court to resolve the escalating jurisdictional battle between state gaming regulators and the federal Commodity Futures Trading Commission over who holds authority to regulate or ban event contracts.
Michigan preliminary injunction against Kalshi
▪Michigan Attorney General Dana Nessel initiated the lawsuit against Kalshi in March 2026 under the state's Lawful Sports Betting Act, alleging Kalshi operates an unlicensed gaming business.
▪Ingham County Circuit Judge Rosemarie Aquilina signed a preliminary injunction on September 1, 2026, ordering Kalshi to stop offering sports wagers and event contracts to Michigan residents.
▪The Michigan preliminary injunction threatens Kalshi with a fine of $500,000 for each day it fails to geofence Michigan residents using a licensed third-party geolocation provider.
▪Judge Rosemarie Aquilina ruled that Kalshi's operations cause immediate and irreparable harm by bypassing patron protections, undercutting school and compulsive gambling prevention funding, and ignoring Tribal sovereignty.
New Jersey Supreme Court petition
▪New Jersey filed a petition for U.S. Supreme Court review on September 3, 2026, asking the court to determine whether federal or state authorities hold regulatory power over prediction markets.
▪New England Law School visiting professor Melinda Rho stated that the U.S. Supreme Court is likely to address whether sports event contracts fall under federal commodities regulation or state gambling rules.
Federal-state jurisdictional conflict
▪The Commodity Futures Trading Commission issued guidance to Kalshi that conflicted with Michigan's June 2026 temporary restraining order, leading Kalshi to argue it could not comply with both simultaneously.
▪The Commodity Futures Trading Commission has sued nine states, including Illinois, Arizona, Connecticut, Wisconsin, and Minnesota, over state-level bans on prediction markets.
Congressional legislation on event contracts
▪The proposed congressional bill aims to restrict prediction-market platforms from offering contracts that function similarly to commercial gambling operations.
▪U.S. Senators Adam Schiff and John Curtis introduced a bill in March 2026 to bar Commodity Futures Trading Commission-registered platforms from listing event contracts resembling sports betting or casino games.
State court rulings blocking Kalshi
▪Kalshi previously attempted to move the Michigan state lawsuit to federal court but lost, returning the case to Ingham County Circuit Court where the preliminary injunction was issued.
▪A Washington state judge ordered Kalshi to drop most of its prediction markets in that state in August 2026, shortly after the Commodity Futures Trading Commission used emergency powers to keep Kalshi trading.
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