Michigan AG Nessel wins second order forcing Kalshi to geofence sports contracts
Michigan Attorney General Dana Nessel secured a preliminary injunction against Kalshi on September 2, 2026, blocking the CFTC-registered platform from offering sports event contracts in the state. The order requires Kalshi to maintain geofencing to prevent Michigan residents from accessing its sports markets. Violations carry a $500,000 penalty per violation. The state-level action marks Nessel's second court order against Kalshi's Michigan operations, running parallel to federal CFTC oversight of the platform.
Kalshi must now maintain active geofences in Michigan, Nevada, and Baltimore as state courts reject its CFTC registration as a shield against local gambling laws. Each new geofence shrinks the territory where federal designation protects contract validity, and traders hold positions whose legality shifts with state borders.
Michigan follows Connecticut's suit from the prior day, emboldening attorneys general to file cheap parallel actions. Kalshi's legal spend compounds across multiple fronts while its national sports market fragments. The Supreme Court petition that New Jersey filed offers the only path to a unified federal rule, but months of uncertainty remain while state bans accumulate.
The third active state geofence mandate on Kalshi, after Nevada and Baltimore, deepens the circuit-level split that New Jersey has already asked the Supreme Court to resolve.