Judge Rosemarie Aquilina has now extended the ban on Kalshi’s sports contracts, giving the site a hard deadline of 12th August to roll out geofencing. If Kalshi doesn’t comply, they will now face fines of $500,000 per day.
The original fine was $120,000 per day, but seeing as Kalshi has so far not complied with the geofencing, Judge Aquilina is holding firm. But Kalshi’s situation is proving to be more difficult, following the CFTC stepping in and blocking Kalshi from cancelling trading in Michigan. With two regulators offering contradictory guidance, what will Kalshi do?
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Judge Aquilina Points Out Kalshi’s Loophole
On 29th June 2026, Judge Aquilina ruled that the sports trading at Kalshi is illegal in Michigan. As such, Kalshi was ordered to prevent Michigan residents from accessing sports event contracts through geofencing. Kalshi was given a two-week deadline; otherwise, they would face $120,000-per-day fines. Kalshi managed to get a pause on proceedings while they went through legal arguments, but the Judge pointed out that the current situation has a major loophole.
As of now, Kalshi has a simple verification system in which all new users are required to create an account using their residential address details. Anyone who has a Michigan address is blocked. However, despite Kalshi’s efforts, users within Michigan can still open an account and access sports contracts. Therefore, absolutely anyone can still trade on sports, despite the location rules on the site. So, Judge Aquilina doesn’t think it’s good enough and is demanding it be improved.
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CFTC Vs. Michigan: Two Contradictory Orders
The same week that Judge Aquilina cracked down on Kalshi, the CFTC (Commodity Futures Trading Commission) decided to block Kalshi’s plans to cancel trading for Michigan residents. Instead, the CFTC ordered Kalshi to continue as it is, with the CFTC Chair stating, “A state cannot force [Kalshi] to violate its obligations, and federal law does not permit [Kalshi] to discriminate against a state’s residents.” The CFTC Chair was clear in that he wasn’t happy to follow state court orders that contradict any federal regulatory obligations, which he noted goes for all sites in the
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It’s worth noting that while Kalshi was battling the state court, Kalshi’s attorney built the entire case around the Commodity Exchange Act. This argued that Congress has designed the federal futures framework in such a way that it can override state gambling law. Judge Aquilina heard the argument but simply responded with, “You aren’t really talking about commodities, interest rates, things like that, but gambling, which has traditionally been denied by the states. What you’re doing is defining it in a way that works for you, but not for Michigan.”.
Final Thoughts on Kalshi’s Michigan Ban
12th August 2026 is the hard deadline for Kalshi to roll out geofencing that Michigan state regulators approve of; otherwise, it will face $500,000 in fines per day. This has increased from the original $120,000, due to Kalshi’s temporary pause while they fought against the court order. What makes the situation even harder for Kalshi is the CFTC’s involvement. Kalshi is now sitting between a state court that is demanding geofencing to be implemented and a federal regulator who’s requesting that Kalshi fulfil trades for Michigan residents. Quite simply, Kalshi is in quite a predicament, with the deadline closing in. Use the banners here to find out if Kalshi is available in your state.
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