Kalshi Is Now Blocking Michigan Users — and Faces a Nevada Contempt Hearing on 16 July
Prediction market litigation has crossed from courtrooms to actual platform access restrictions. A Michigan state court issued a temporary restraining order on 29 June requiring Kalshi to halt sports contracts until 13 July — $120,000-per-day fines for non-compliance — and Kalshi began geofencing Michigan users on 7 July. Nevada is seeking to hold Kalshi in contempt after investigators purchased prohibited contracts eight times while in the state. Polymarket filed its first independent federal lawsuit, against New Mexico.
The prediction-market litigation wave has produced its first concrete platform-access restrictions. On 29 June, Ingham County Circuit Court Judge Rosemarie Aquilina signed a temporary restraining order obtained by Michigan Attorney General Dana Nessel, requiring KalshiEx to halt sports event contracts in the state until 13 July, on penalty of $120,000 per day. Kalshi said it would comply while contesting the underlying lawsuit, and on 7 July the platform began blocking Michigan users from its sports markets — the first case where a court order has caused visible, on-the-ground changes to what prediction market users can access.
The Michigan TRO comes on top of the 19 June ruling by US District Judge Paul Maloney, who denied Polymarket and Robinhood a federal preliminary injunction on preemption grounds. That ruling was a legal loss; the TRO is an operational one. Michigan users can still access non-sports Kalshi markets, but the state has enforced a partial product block while litigation continues. The $120,000 daily fine creates strong compliance pressure regardless of how the underlying case resolves. An appeal of the Maloney ruling is proceeding in the Sixth Circuit.
In Nevada, the situation is further along and more troubled for Kalshi. The Nevada Gaming Control Board obtained a state-court preliminary injunction on 18 May requiring Kalshi to geofence sports, election, and entertainment contracts from Nevada residents. The Nevada Supreme Court denied Kalshi's bid to pause that order. NGCB investigators then found they could successfully purchase prohibited contracts on eight separate occasions across four days (28-31 May and 1 June) while physically in Nevada, exploiting gaps in Kalshi's $190,000 IP-address-based geofencing system. A full-day contempt hearing is scheduled for 16 July.
The Nevada contempt case raises a question the whole sector must answer: what constitutes technically adequate geofencing? IP-based blocking is the industry starting point but is circumvented by VPNs, mobile data roaming, and certain carrier configurations. More accurate verification — GPS, cell-tower triangulation — is feasible but adds user friction and privacy questions. How courts evaluate 'good-faith compliance' will set the standard for every subsequent injunction. The third development: Polymarket filed its own federal lawsuit in New Mexico on 1 July — its first independent preemption case without the CFTC as lead plaintiff — after New Mexico twice rejected requests to delay enforcement pending the Kalshi case. Ten states are now in active litigation. We have updated our litigation scoreboard to reflect Nevada as the tenth state and the changed status in Michigan and New Mexico.
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Recent updates
Massachusetts Supreme Court Ruling on Kalshi Now Imminent — First State High Court Decision on Prediction Markets
The Massachusetts Supreme Judicial Court is expected to rule within weeks on whether Kalshi's sports event contracts constitute illegal sports gambling under state law — the first time any US state supreme court has decided this question. The SJC appeared skeptical of Kalshi's CFTC-preemption argument at May 5 oral arguments. A coalition of 38 state attorneys general backed Massachusetts; the CFTC backed Kalshi. The outcome will be the first state apex court ruling on prediction markets anywhere in the country.
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