By Nate Raymond
June 29 (Reuters) - A Michigan judge on Monday blocked prediction market operator Kalshi from continuing to allow people in the state to place financial bets on sporting events after the state's attorney general accused it of violating state gaming law.
Ingham County Circuit Court Judge Rosemarie Aquilina issued a temporary restraining order at the behest of Michigan Attorney General Dana Nessel, a Democrat. The judge said she would fine Kalshi $120,000 for each day it does not comply
with the geolocation requirements her order imposes.
The order makes Michigan the second state to implement a court-ordered ban on Kalshi offering events contracts, following Nevada. A similar injunction in Massachusetts has been put on hold while Kalshi pursues an appeal.
"Michigan and its most vulnerable citizens are suffering and will continue to suffer immediate and irreparable harm absent relief from being exploited by Kalshi's sports betting operation masquerading as an investment opportunity," the judge's order said.
She barred the New York-based company from offering sports-events contracts to anyone located in Michigan and ordered Kalshi to utilize a third-party geolocation service provider licensed by the state's gaming control board in order to comply with her restrictions.
Kalshi spokesperson Elisabeth Diana in a statement said the company plans to fight the decision in court. The company has argued it is subject to the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission.
Kalshi, which in a recent funding round was valued at $22 billion, has been at the center of an escalating legal battle over the ability of state gaming regulators to police companies in the fast-growing prediction markets industry.
Kalshi and companies like it allow users to place trades and profit from predictions on events such as sports and elections. States argue that firms like Kalshi are operating without required state licenses, in violation of gaming laws, including bans on wagers by those under 21.
Under President Donald Trump's administration, the CFTC has shared the companies' position that the event contracts users can trade on their prediction markets fall exclusively under the agency's jurisdiction.
(Reporting by Nate Raymond in Boston; Editing by Matthew Lewis)
