Michigan Judge Extends Kalshi Sports Contracts Ban With August 12 Geofencing Deadline

Key Takeaways

• Ban Extension: Judge Rosemarie Aquilina extended the temporary restraining order banning Kalshi sports event contracts in Michigan, citing jurisdiction over gambling regulation.
• Geofencing Mandate: Kalshi must implement full geofencing by the end of August 12 or face $500,000 daily fines after an initial $120,000 penalty structure.
• Volume Incentives: Kalshi processed $30 billion in trading volume over the last 30 days amid the World Cup, generating more than $10 million in daily fee revenue.
• Preemption Rejected: The court remained unconvinced that the Commodity Exchange Act shields Kalshi from state gambling laws.

“Gambling regulation is within the realm of Michigan.” With those words, Judge Rosemarie Aquilina of Michigan’s 30th Circuit Court extended the temporary restraining order against Kalshi’s sports event contracts. The ruling, detailed in reporting by InGame, sets a firm deadline with geofencing to begin Aug. 12 or risk $500,000 daily fines.

The decision builds on Aquilina’s June 29 finding that Kalshi’s sports contracts constitute illegal sports betting under state law. It also pauses full enforcement while the platform demonstrates progress on technical compliance. This case stands as one of only two successful state enforcements against Kalshi, joining Nevada.

Judge Rejects CEA Preemption Claims

Kalshi lawyer Will Havemann argued before Aquilina that the platform was not subject to state gambling laws. He pointed to the history of grain futures trading once labeled as gambling in the early 20th century.

Havemann said, “So Congress made a decision in 1974 that regardless of whether a state thought it was gambling, it was going to entrust a specific federal agency.” Yet Aquilina appeared unmoved.

“But you aren’t really talking about commodities, interest rates, things like that, but gambling, which has traditionally been denied by the states,” she said. “What you’re doing is defining it in a way that works for you, but not for Michigan.”

Fitzsimons said, “If mere usage of the word ‘exclusive’ is enough to preempt state gambling law, then it would preempt state gambling law as well. But Kalshi says that it is subject to New York contract law.” The only question the judge asked during Fitzsimons’ initial argument was, “Swaps have never included gambling, correct?”

This exchange reveals a core tension. Federal oversight of event contracts collides with long-standing state authority over gambling. As InGame first reported, the court found conflict preemption does not apply because Kalshi can comply with both federal and Michigan rules.

World Cup Volume Creates Clear Incentives to Delay

Fitzsimons argued that Kalshi had a financial incentive to delay geolocation. “Part of why Kalshi is trying to drag this out is the World Cup,” she said. “Over the last 30 days, Kalshi’s volume has been $30 billion.”

The platform has earned more than $10 million in daily fee revenue during the tournament. That figure suggests Michigan-derived revenue could easily exceed the original $120,000 daily fine.

“Kalshi is incentivized to drag this out and avoid geofencing for as long as possible, because it is financially beneficial to do so,” Fitzsimons said.

@InGameHQ captured the dynamic in a July 9, 2026 post: “Kalshi does not yet have to geofence Michigan, despite an initial temporary restraining order requiring it to do so, after a court amended that order to investigate the ‘viability’ of the prediction market geofencing.”

Current blocking relies on sign-up addresses rather than real-time location. This permits visitors in Michigan to trade while blocking Michigan residents traveling elsewhere. The gap underscores why the state pursued stricter measures.

Geofencing Feasibility Debated in Technical Testimony

Kalshi lawyers told the court the company is working with GeoComply but could not yet provide a firm timeline. Havemann stressed compliance efforts.

“I do really want to emphasize that we’ve gone to great lengths to comply,” he said. “But we are doing our best, including with respect to GPS and geofencing, and the work is underway.”

GeoComply Senior Vice President of Geolocation Chad Kornett testified that implementation typically takes one to two weeks once the customer is ready. He distinguished IP-based blocking from full GPS solutions.

“I’m sat here in my house and it shows four different locations, and I could have chosen any number more with a VPN,” he said.

Kornett said, “I have heard very positive things about the engagement.” Kalshi lawyer Andrew Porter later said that elements of the CFTC’s rules mean that extensive testing would be required before Kalshi could be ready to implement geofencing.

The judge quadrupled the originally requested time, granting 30 days but warning against last-minute efforts. Failure to show steady progress could trigger the escalated $500,000 daily penalty starting August 13.

Where Limitations in Current Coverage Emerge

Reporting by InGame and aggregated coverage through Google News deliver precise detail on the hearing, the $30 billion volume figure, and the technical testimony. Yet the combined accounts underemphasize how this friction exposes deeper structural vulnerabilities for all prediction market participants.

State pushback of this intensity during a high-visibility event like the World Cup signals regulators may treat sports event contracts as gambling regardless of CFTC designation. This creates compliance cost layers that smaller operators could struggle to absorb.

The ruling also surfaces questions around uniform enforcement. Michigan and Nevada have succeeded where many other states have not. For client-partners monitoring these developments, the pattern suggests fragmented state-by-state litigation could become the default rather than exception.

The Preemption Tension and Path to Clarity

This extension of the Michigan ban, complete with the August 12 geofencing trigger and $500,000 daily fine threat, marks an inflection point in the federal-state contest over event contracts. The court’s plainspoken rejection of preemption arguments reinforces that traditional state gambling authority retains force even against CFTC-approved platforms.

Operators face immediate strategic choices. Robust geofencing partnerships like the one Kalshi is building with GeoComply become table stakes, yet the testimony shows integration demands time, testing, and capital. The World Cup revenue window illustrates how event-driven volume can amplify incentives on both sides.

Looking ahead, the August status conference will test whether Kalshi meets the judge’s demand for continuous progress. Broader resolution likely requires legislative or higher-court clarification on where commodity regulation ends and state gambling oversight begins. Until then, prediction market platforms and their client-partners must treat regulatory ambiguity as a core planning input rather than a temporary hurdle.

The convergence of high-stakes events, technical feasibility questions, and competing legal frameworks will continue shaping market access. Those prepared to invest in compliant infrastructure while contributing to the policy dialogue stand to navigate the shift most effectively.

Reporting: Michigan Ban On Kalshi Sports Contracts Extended, With Geofencing To Begin Aug. 12 (www.ingame.com)