Michigan Judge Blocks Kalshi Sports Betting Amid Regulatory Scrutiny

A Michigan judge temporarily blocked prediction market Kalshi from allowing residents to place bets on sporting events, after the state's attorney general accused the platform of violating gambling laws.

Kalshi was hit with a temporary restraining order from Ingham County Circuit Court Judge Rosemarie Aquilina, who said the platform would be fined $120,000 for each day it fails to comply with the order’s geolocation requirements, according to a Monday court filing. The order lasts for 14 days and expires on July 13.

Aquilina wrote that Michigan residents would suffer irreparable harm from being “exploited by Kalshi's sports betting operation masquerading as an investment opportunity.”

The move adds to the growing regulatory scrutiny on prediction market sports betting. It makes Michigan the second US state to enact a court-ordered ban on Kalshi’s sports event contracts, after Nevada issued a temporary ban on Kalshi earlier in March.

On June 17, Kentucky sued five prediction market platforms, including Kalshi and Polymarket, accusing them of operating unlicensed sports betting platforms. More than a dozen other states have taken prediction market operators to court.

The US Commodity Futures Trading Commission (CFTC) has sued several states, arguing that federally regulated event contracts fall under its exclusive authority.

Cointelegraph has approached Kalshi for comment on how the platform will respond to the verdict.

Prediction market sports betting rises after the FIFA World Cup

Sports betting activity has been rising on prediction markets since the beginning of the FIFA World Cup.

Daily taker volume, which measures contracts bought or sold by traders filling existing orders, reached a record $713 million on June 20, according to Dune data. The milestone came more than a week after the World Cup started on June 11.

Looking at monthly prediction market volume, sports betting was the leading category on the two largest prediction markets, rising 40% to $9.5 billion on Kalshi and 175% to $5.3 billion on Polymarket, Defirate data shows.

A June 11 Bernstein report predicted that the 2026 FIFA World Cup would generate more than $3 billion in incremental sports betting handle and between $5 billion and $10 billion in additional consumer prediction market volume.

The World Cup winner contract alone has generated over $3.5 billion in trading volume on Polymarket, according to platform data.

The growing betting activity helped Polymarket emerge as an onboarding layer for new cryptocurrency users, as about 60% of World Cup bettors interacted with the blockchain for the first first time during their prediction market entry, according to a Bitget Wallet study of 857,000 users, shared with Cointelegraph.