Michigan attorney general sues Kalshi over sports event contracts
Michigan Attorney General has sued Kalshi over its sports event contracts, joining state-level challenges to the prediction market platform's sports offerings.
Kalshi's federal preemption defense is now under assault from two directions at once. State attorneys general are filing copycat suits while tribal nations win appellate rulings that CFTC designation does not block state gambling law. Michigan's action follows Connecticut and Missouri, and the Ninth Circuit has now ruled twice against Kalshi's preemption theory in Nevada and California. Each new filing or ruling emboldens the next challenger.
Kalshi must split legal budgets across parallel cases instead of mounting one clean federal defense. Polymarket and other CFTC-registered platforms face identical exposure because the same reasoning reaches any venue offering sports-linked contracts. Traders hold positions whose validity now shifts with geography, not regulation. A geofence in any major state would fragment liquidity before any final ruling lands.