Michigan court orders Kalshi to maintain geofencing for sports event contracts
A Michigan state court entered a preliminary injunction on September 2 requiring Kalshi to maintain geofencing that blocks users within Michigan's borders from accessing its sports event contracts. Violations carry a $500,000 penalty. Michigan Attorney General Nessel secured the order. The state-level action marks a separate front in the prediction-market jurisdiction fight, distinct from federal CFTC oversight. The ruling forces Kalshi to add Michigan to its geofence list as state attorneys general treat CFTC-registered platforms as unlicensed sportsbooks.
Kalshi must now geofence Michigan or face $500,000 penalties per violation. That adds a second state to its fence list after Nevada, shrinking the territory where its CFTC designation protects contract validity. Traders hold positions whose legality shifts with state borders, not federal rules. Connecticut's parallel suit means Kalshi now faces parallel litigation on both coasts while New Jersey asks the Supreme Court to strip preemption nationwide.
Each new state loss emboldens the next attorney general to file. Legal spend compounds across cases while the national sports market fragments into a patchwork of active bans. A Supreme Court ruling against preemption would let every state treat CFTC platforms as unlicensed sportsbooks, collapsing the federal shield entirely.