The state of Michigan has achieved a significant legal victory against Kalshi and the wider prediction market sector after securing a court order banning the operator from allowing sports event contract trading on its platform.
A 14 day restraining order has been placed on the prediction market platform by Ingham County Judge Rosemarie Aquilina, who signed it into law just days after a directive from a federal judge which handed the prerogative of the issue back in state court control.
Advertising ban also implemented in Michigan
The injunction not only bars Kalshi from offering sports event contracts in Michigan while the case proceeds, but also prohibits the company from marketing or advertising those products to residents of the state. The restrictions will remain in place until the litigation is resolved or the court issues a new order.
Michigan is one of several states that have taken action against federally regulated prediction market operators as the legal battle over jurisdiction intensifies. Gambling regulators in states including Nevada, New Jersey, Maryland, Ohio and Illinois have also sought to block sports event contracts, arguing they function as unlicensed sports betting, while Kalshi maintains the products fall under the exclusive oversight of the federal Commodity Futures Trading Commission (CFTC).
In a statement, Michigan Attorney General Dana Nessel expressed her delight in the ruling. She said: “Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences.
“I am proud of the attorneys in my office who not only kept this case in state court but also secured an order protecting residents as this litigation moves forward. We remain committed to enforcing a level playing field for all gambling platforms in Michigan and ensuring that companies cannot evade accountability or exploit consumers under the guise of a prediction market.”
Kalshi responds, saying it won’t be bullied
Kalshi said it intends to appeal the ruling, maintaining that its event contracts fall under the exclusive authority of the federal government rather than state gambling regulators. Company spokeswoman Elisabeth Diana said the platform would continue challenging state enforcement efforts in court.
“Kalshi is subject to exclusive federal jurisdiction,” Diana said. “We won’t be bullied by interests that care more about protecting their monopolies than their consumers.”
The comments are consistent with Kalshi’s response to similar legal setbacks in other states. The company has repeatedly argued that, as a federally regulated exchange overseen by the CFTC, its event contracts cannot be regulated or prohibited by individual states. Following cease-and-desist orders and lawsuits in jurisdictions including Nevada, Maryland and New Jersey, Kalshi has said state regulators are attempting to shield licensed sports betting operators from competition rather than enforce gambling laws.
Meta tried to buy Kalshi, reports suggest
Meanwhile, Meta Chief Executive Mark Zuckerberg held talks last year about acquiring prediction market platform Kalshi before deciding to develop the company’s own competing product, according to people familiar with the discussions cited by NPR. The takeover talks reportedly never progressed, with accounts differing over whether Kalshi declined to sell or Meta backed away over legal and ethical concerns.
Instead, Meta is developing an artificial intelligence-powered prediction market app known internally as Arena. According to documents reviewed by NPR, the platform will allow users to make predictions on news events and trending topics using virtual currency rather than real-money wagers, with AI generating markets and determining outcomes.
Neither Meta nor Kalshi commented on the reported acquisition discussions. The move comes as prediction markets have emerged as one of the fastest-growing segments of the technology and financial sectors, attracting millions of users and increasing scrutiny from regulators.
Tim Wu, a law professor at Columbia University and former White House technology adviser, questioned Meta’s strategy, arguing the company has a history of pursuing popular trends. “Meta seems to clutch at every shiny object,” Wu said, adding that the company’s advertising business has allowed it to “fail again and again without consequence.”
Wu also expressed skepticism about the appeal of the planned platform, saying, “I can’t imagine a casino app with fake money is going to be much of a thrill. But maybe it’s something my children would like, I don’t know.”