Michigan asks court to hold Kalshi in contempt over adverts
State attorney general Dana Nessel says Kalshi kept advertising to Michigan residents after a September injunction barred it from doing so, and wants the company sanctioned.
Michigan's attorney general has asked an Ingham County Circuit Court judge to hold prediction market operator Kalshi in contempt, alleging the company continued advertising to state residents after being ordered to stop.
Dana Nessel's office made the claim in a court filing seeking sanctions against Kalshi, reported by SBC Americas. The filing accuses the company of defying a preliminary injunction issued on 1 September, stating that Kalshi "elected to thumb its nose at the Court".
Judge Rosemarie Aquilina granted Nessel's request for a show-cause hearing last week and has scheduled it for 24 November. SBC Americas said it sought comment from Kalshi but had not received a response by the time of publication.
Nessel's filing points to three individuals who received Kalshi marketing after the September injunction took effect, across email, social media and YouTube. Two saw adverts promoting "markets you don't want to miss", while a third was shown a targeted advert reading "Kalshi: Trade Football and More", encouraging a download of the app to bet on NFL football.
The filing also notes that Kalshi had stated in July that it had stopped targeting adverts to Michigan users, a claim Nessel's office says came weeks after the state had already secured a temporary restraining order against the company.
According to the filing, the September injunction expressly bars Kalshi from "[a]dvertising, promoting, marketing, or soliciting participation in any internet sports betting contract to persons located in Michigan or using a Michigan address, including via websites, mobile apps, email, push notifications, social media, influencers, affiliates, or paid placements." Nessel's office argues the alleged advertising breaches amount to "a willful disregard" of that order.
Michigan regulators have taken an unusually aggressive stance on prediction markets since the state built out a wide-ranging legal gambling framework, covering online sports betting, iGaming and online poker, in December 2019. State officials have since pursued enforcement action against fantasy sports, sweepstakes and prediction market operators they consider to be operating without proper authorisation.
Other prediction market operators have moved to settle with Michigan rather than continue fighting in court. Coinbase agreed to stop offering sports event contracts in the state from 10 October, in exchange for which Michigan will hold off pursuing legal action against it for now. Robinhood struck a comparable arrangement with regulators in September, pausing its Michigan operations while the broader federal legal dispute over prediction markets continues.
Kalshi itself had earlier agreed to stop offering sports event contracts in Michigan following setbacks in court, after facing the threat of fines of up to $500,000 per day for failing to geoblock state residents. The company has argued that blocking Michigan users would breach its obligations under Commodity Futures Trading Commission rules requiring uniform access to its markets.
In the latest filing, Nessel's office asks Aquilina not only to find Kalshi in contempt of the September order but also to impose fines and require the company to cover the costs the attorney general's department has incurred enforcing the injunction, along with its legal fees for bringing the motion.