The U.S. Commodity Futures Trading Commission (CFTC) has mandated that the prediction platform Kalshi continue processing trades for Michigan residents as usual. This comes after a state court previously ordered the platform to cancel those same trades.
.@CFTC Stays KalshiEX Rule Change and Exercises Emergency Authority to Order Fulfillment of Pending Trades: https://t.co/iQEA72sMGt
— CFTC (@CFTC) July 14, 2026
In March, Michigan Attorney General Dana Nessel filed a lawsuit against Kalshi on behalf of the state and the local gaming regulator. Authorities believe the platform was offering unlicensed sports betting to residents under the guise of trading event outcome contracts.
On June 29, District Court Judge Rosemary Aquilina temporarily prohibited Kalshi from offering, matching, executing, and settling sports-related contracts for Michigan users. The company was also required to implement a third-party geolocation system that meets state regulatory standards, with a potential fine of $120,000 per day for non-compliance.
The initial ban was set to last until July 13, but Aquilina later extended it to August 12. From August 13, the daily fine for non-compliance is expected to increase to $500,000. The end date for the extended restrictions has not been established.
After Kalshi requested a modification of the injunction, the court clarified that certain trades for Michigan residents must be canceled, refunded, and reversed.
On July 12, the platform submitted an emergency rule to the CFTC for the forced liquidation of affected positions at current market value. However, on July 14, the regulator suspended this action and ordered the completion of settlements as usual.
The Commission believes that Kalshi's contracts fall under federal regulatory jurisdiction, and a single state cannot compel the platform to impose special conditions on its residents.
“Canceling already executed trades is an unprecedented move that threatens to create a cascading effect across the entire market,” stated CFTC Chairman Michael Selig.
Kalshi's Chief Compliance Officer and Counsel, Robert Denault, indicated that the company had canceled trades prior to the regulator's order.
We are disappointed by this decision and believe it is unfair to Kalshi. We already acted and unwound the trades, as the Michigan court order required us to do.
We are being put in an impossible position, looking to follow state court orders that may contradict our federal… https://t.co/M81qNaOzCY
— robertjdenault (@robertjdenault) July 14, 2026
“We are being put in an impossible position, forced to comply with state court orders that may conflict with our federal regulatory obligations. We had no choice,” he wrote.
The Commission has suspended the emergency rule for 90 days. The procedure includes a 30-day public comment period, after which the regulator must make a final decision.
It is worth noting that in June, Kentucky authorities filed lawsuits against Kalshi and Polymarket, accusing the platforms of facilitating unlicensed sports betting under the guise of prediction markets.