The CFTC just told a Michigan state court, politely but firmly, to stay in its lane. On July 14, the federal derivatives regulator used its emergency authority to prevent Kalshi from complying with a Michigan court order that demanded the prediction market platform cancel trades made by Michigan residents and stop offering sports-related event contracts in the state.
What actually happened
On June 29, a Michigan state court issued a temporary restraining order against KalshiEX LLC, the CFTC-registered prediction market platform. The TRO had two demands: stop letting Michigan residents trade sports-related event contracts, and cancel the trades that had already been executed.
The CFTC directed Kalshi to settle its outstanding contracts through normal procedures rather than unwinding them at a state court’s request. CFTC Chairman Michael Selig framed the issue in jurisdictional terms, stating that a state cannot compel a designated contract market to violate federal laws.
Kalshi is a CFTC-registered DCM. That registration authorizes the platform to list event contracts across the entire US under federal derivatives rules. The Michigan court’s order essentially asked Kalshi to act as if that federal authorization didn’t exist within Michigan’s borders.
