LANSING, MI (WOWO) Michigan Attorney General Dana Nessel has filed a lawsuit in Ingham County Circuit Court against Kalshi, a New York-based prediction market platform, alleging it illegally offers sports betting to state residents. According to the complaint, Kalshi allows users to trade contracts on the likelihood of events, including sports games, political elections, and other outcomes, but roughly 90% of its trading involves sports.

The lawsuit claims that under the state’s Lawful Sports Betting Act, only state-licensed casinos or federally authorized tribal casinos can operate sports betting platforms. Kalshi, the complaint argues, falls into neither category and is therefore operating unlawfully. Michigan is seeking a court order declaring the platform a sports betting app and a permanent injunction to stop its operations in the state, according to Bridge Michigan.

Prediction markets like Kalshi are regulated federally by the Commodity Futures Trading Commission, which allows the company to operate in states where gambling is otherwise illegal. Michael Selig, chair of the CFTC, has argued that the agency has authority over these markets and opposed state restrictions, stating in The Wall Street Journal that the CFTC will not allow states to undermine federal jurisdiction over prediction markets.

Michigan’s action follows similar lawsuits in Nevada, where a judge upheld the Gaming Control Board’s authority against Kalshi, and in Massachusetts, where the attorney general also alleged violations of wagering laws. The legal disputes highlight ongoing questions about whether prediction markets should be treated as financial products under federal law or as gambling under state regulations. Credit: Associated Press.