Kalshi Is Now Blocking Michigan Users — and Faces a Nevada Contempt Hearing on July 16
For the first time, prediction market litigation has crossed from the courtroom to actual platform access restrictions. A Michigan state court issued a temporary restraining order on June 29 requiring Kalshi to halt sports contracts until July 13 — with $120,000-per-day fines for non-compliance — and Kalshi began geofencing Michigan users on July 7. Separately, Nevada is seeking to hold Kalshi in contempt after investigators successfully purchased prohibited contracts eight times while physically in the state. Polymarket also filed its first independent federal lawsuit, against New Mexico.
The prediction-market litigation wave has produced its first concrete platform-access restrictions. On June 29, 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 July 13, on penalty of $120,000 per day. Kalshi said it would comply while continuing to contest the underlying lawsuit, and on July 7 the platform began blocking Michigan users from its sports markets. It is the first case in the 2026 litigation wave where a court order has caused visible, on-the-ground changes to what prediction market users can access — moving from a fight over legal theory to a fight over who can use the product.
The Michigan TRO comes on top of the June 19 ruling by US District Judge Paul Maloney, who denied Polymarket and Robinhood a federal preliminary injunction on preemption grounds. That ruling — covered here when it happened — was a legal loss. The TRO is an operational one: Michigan users can still access non-sports Kalshi markets, but the state has effectively enforced a partial product block while the litigation continues. The $120,000 daily fine structure creates strong compliance pressure regardless of how the underlying case ultimately resolves. An appeal of the June 19 Maloney ruling is proceeding separately 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 May 18 requiring Kalshi to geofence sports, election, and entertainment event contracts from Nevada residents. The Nevada Supreme Court denied Kalshi's bid to pause that order. What followed matters: NGCB investigators testing the geofencing found that they could successfully purchase prohibited contracts on eight separate occasions across four days (May 28, 30, 31, and June 1) while physically located in Nevada. The alleged failure was attributed to Kalshi's geofencing solution — a homegrown, IP-address-based system built for roughly $190,000, which is notoriously unreliable because IP addresses do not reliably identify physical location. A full-day contempt hearing is scheduled for July 16, with a possible extension to July 31.
The Nevada contempt case raises a question the whole sector now has to answer: what does technically adequate geofencing look like, and who decides? IP-based geofencing is the industry standard starting point, but it can be circumvented by VPNs, mobile data roaming, and certain carrier configurations. More accurate location verification — GPS, cell-tower triangulation, device sensors — is technically feasible but adds friction to the user experience and raises its own privacy questions. How courts evaluate 'good faith compliance' will set the standard for every other state that obtains an injunction. If Kalshi is held in contempt and fined, the signal to the other litigation states is that IP-based blocking is insufficient and something more robust is required.
The third development of the week is Polymarket filing its own federal lawsuit in New Mexico on July 1, seeking a declaratory judgment that state law cannot preempt the Commodity Exchange Act and a preliminary injunction blocking New Mexico from taking enforcement action against it. This is notable because Polymarket has generally let the CFTC lead the legal fight in each state, with its own participation limited to supporting motions. New Mexico twice rejected Polymarket's requests to delay any enforcement until the Kalshi case resolved. The independent filing puts Polymarket directly in the litigation, alongside the existing CFTC suit, and is the first time the platform has brought its own preemption case without the agency as lead plaintiff. The litigation scoreboard has been updated to reflect Nevada as the tenth state in active litigation 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 heard oral arguments on May 5 in the Kalshi prediction markets case and is expected to issue a decision within weeks. The SJC appeared skeptical of Kalshi's argument that CFTC regulation preempts state gambling law, and the court's ruling will be the first state supreme court decision on prediction markets anywhere in the country. Massachusetts AG Andrea Campbell secured a preliminary injunction blocking Kalshi's sports contracts in January 2026. The CFTC filed an amicus brief supporting Kalshi; a coalition of 38 state attorneys general filed an opposing brief supporting Massachusetts.
27 States Back California Tribes Suing Kalshi Over Sports Contracts Under Indian Gaming Law
Three California tribes — Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians — are separately challenging Kalshi's sports event contracts in the Ninth Circuit under the Indian Gaming Regulatory Act, a federal law distinct from the Commodity Exchange Act preemption arguments at issue in Nevada, New Jersey, and Connecticut. The Ninth Circuit refused to consolidate the tribal case with the Nevada case. A Ninth Circuit panel appeared skeptical of Kalshi in July hearings, and 27 states plus the District of Columbia have filed amicus briefs supporting the tribes. The IGRA theory, if it succeeds, could block Kalshi from operating sports contracts in any state where tribal gaming compacts exist — a category that includes most US states.
SCOTUS Review of Prediction Markets Hits 64% on Polymarket — New Jersey Files Cert Petition September 3
The probability of Supreme Court review of prediction market sports contracts jumped from around 30% to 64% on Polymarket's own platform within hours of the Ninth Circuit's August 28 ruling — with $976,000 in trading volume flowing into the contract. New Jersey, the losing party in the Third Circuit's April ruling that went for Kalshi, is filing a certiorari petition on September 3. The Ninth Circuit's 3-0 ruling against Kalshi directly contradicts the Third Circuit's 2-1 ruling for Kalshi, creating the clearest possible circuit split trigger for SCOTUS to grant review.