A Michigan court has ordered prediction market operator Kalshi to stop offering sports betting markets in the state, with penalties of up to $500,000 per day for non-compliance.
The Ingham County Circuit Court Judge Rosemarie E. Aquilina gave the preliminary injunction based on the lawsuit filed by the Michigan Attorney General Dana Nessel, who claimed that Kalshi has been operating illegal sports betting markets.
The rule extends a temporary restraining order issued in June and will remain until the ruling becomes final.
The court has observed that Michigan and its vulnerable residents are in danger by Kalshi’s continuation in offering sports wagering contracts. It notes that residents need to be at least 21 years old while Kalshi permits anyone aged 18 to participate.
The order stated that Kalshi “takes advantage of serious mental health issues without providing the protections that Michigan’s regulatory structure was designed to do” and “eludes the comprehensive patron protection mechanisms found in Michigan’s regulatory framework.”
The injunction prohibits Kalshi from offering or carrying out any sports contracts to people who are in Michigan. They are not allowed to allow deposits, account operations or advertising via websites, apps, e-mails, social media, bloggers, etc.
Kalshi is obligated to utilize the services of a third-party geolocation company which holds a license from the Michigan Gaming Control Board in order to prevent residents from accessing restricted markets.
If the court finds that Kalshi fails to meet the required geofencing standards, the company could face a $500,000 fine for every day of non-compliance.
