CFTC Orders Kalshi to Defy Michigan Court Order
Jesse M. Cox Published 16/07/2026
The Commodities Futures Trading Commission (CFTC) is ordering Kalshi to defy a Michigan court order banning it from offering sports-event contracts. Late last month, a Michigan judge issued a temporary restraining order barring Kalshi from offering sports-event contract prediction markets in the state for 14 days.
In a release, the CFTC announced that it was exercising its authority to stay an emergency rule change proposed by Kalshi in response to a Michigan state court order directing the company to cancel certain previously executed trades involving Michigan residents. The CFTC also exercised its emergency authority to order Kalshi to fulfill the open trades in accordance with its normal practices.
The CFTC says Michigan is overstepping its regulatory boundaries
In issuing its directive to Kalshi, the CFTC insists that it is compelled to do so by federal law. "The Commodity Exchange Act requires the CFTC to provide a uniform national market in derivatives transactions," the CFTC noted in a release.
As the federal regulator of prediction market sites like Kalshi, the CFTC is also accusing state regulators and the Michigan courts of overstepping their boundaries. It insists that the temporary restraining order issued against Kalshi is not valid.
“A state cannot force a DCM to violate its obligations, and federal law does not permit a DCM to discriminate against a state’s residents,” CFTC Chairman Michael S. Selig said. “Canceling trades that have already been executed is an unprecedented step that risks a cascading effect on the entire marketplace and undermines the certainty in contracting that is a necessary component of a functioning market.
"The Commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations.”
While noting that Michigan is the first state to attempt to interfere directly with executed derivatives transactions, the CFTC pointed out that other states have attempted to bring enforcement actions against CFTC-regulated DCMs in state and federal courts throughout the nation. Taking what it considers to be necessary action to protect the jurisdiction granted to it by Congress, the CFTC has filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin. The CFTC has also filed amicus briefs in the U.S. Court of Appeals for the Sixth and Ninth Circuits and the Supreme Judicial Court of Massachusetts.
A representative from Kalshi indicated that the company was reviewing the CFTC's order and considering its next steps.
Michigan judge agrees with state assertions
Ingham, Michigan County Circuit Court Judge Rosemarie Aquilina issued the 14-day temporary restraining order. It bars Kalshi from offering sports-event contracts to Michigan residents. In her finding, the judge agreed with the state's assertion that the Kalshi platform was violating state gambling laws.
Michigan Attorney General Dana Nessel sought the halt, noting that Kalshi was not licensed to offer sports betting in Michigan. The judge agreed with the state's case. During the term of the injunction, Kalshi is required to geofence its product in Michigan. As part of the judge's ruling, Kalshi would be fined for violations of this order.
The Court order is extended
At a hearing on Monday, Judge Aquilina extended the temporary restraining order against Kalshi. She gave the prediction market company until August 12 to geofence its product across Michigan. Absent another extension from the court, Kalshi will be facing daily fines of $500,000 beginning August 13. These fines would be for failure to geofence its product in Michigan.
Judge Aquilina also indicated that there was no expiration date in place on the extension of the temporary restraining order.