CFTC Orders Kalshi to Complete Trades Amid Michigan Legal Battle
The CFTC (Commodity Futures Trading Commission) has ordered Kalshi to complete prediction market trades in defiance of a Michigan state court order.
The order comes amidst an ongoing battle with Michigan authorities, who are attempting to stop Kalshi from operating in the state without a betting license.
A state court order was issued on June 29. It effectively stopped Kalshi from allowing Michigan residents to buy or sell event contracts on the platform.
However, the CFTC is fighting back, arguing that Kalshi must comply with federal rules as a condition of its license.
At a Glance:
- Michigan state court issued a temporary restraining order on June 29
- CFTC is using an emergency authority to stop Kalshi from complying with the restraining order
- CFTC orders Kalshi to settle its outstanding event contracts for MI customers
- Kalshi stuck in the middle as it is regulated by the CFTC
- 2026 has already seen multiple legal battles between states and CFTC
CFTC highlights Commodity Exchange Act rules in latest skirmish
The CFTC has come out fighting in the latest round of states-vs-federal regulator squabbles.
“The Commodity Exchange Act requires the CFTC to provide a uniform national market in derivatives transactions," said the CFTC. "Market participants must have impartial access to CFTC-regulated markets and registered entities must adopt transparent access criteria that are applied in a non-discriminatory manner.”
Under the rules, the CFTC argues, customers in Michigan mustn’t be excluded from prediction markets that are regulated by a federal body.
“A state cannot force a DCM [Designated Contract Market] to violate its obligations, and federal law does not permit a DCM to discriminate against a state’s residents,” said Michael S. Selig, CFTC chairman.
CFTC cites ‘public confidence’ in prediction markets
For individual states like Michigan and Nevada, where ongoing legal battles against Kalshi persist, it comes down to who regulates prediction markets.
The CFTC argues that it boils down to the integrity of the Commodity Exchange Act.
Ongoing legal battles, many of which occurred this year, damage the image of prediction markets, the CFTC says.
“The Commission is also tasked with ensuring continued public confidence in derivatives markets by guaranteeing market resilience and predictability, including in the execution and clearing of transactions,” it said in a press release this week.
Michigan battleground one of many in the US in 2026
The seemingly endless war between the CFTC and state regulators shows no sign of stopping.
Illinois, Arizona, and Connecticut argue that prediction markets are effectively sportsbooks, and that they must regulate them.
The CFTC counters this, saying that they are derivatives platforms regulated under the Commodity Exchange Act. The CFTC even took matters to court, suing those three states earlier this year for state interference.
Elsewhere, New Jersey, one of the early adopters of legalized sports betting, tried to stop Kalshi from accepting trades in the Garden State.
However, a U.S. federal appeals court ruling came down in favor of Kalshi. The close vote means the Supreme Court is likely to take up the matter before the year is out.
The Commodity Futures Trading Commission and state regulators continue their tug-of-love battles over prediction markets. Who ultimately gets custody will be one of the most interesting legal outcomes of 2026.
