Michigan attorney general sues Kalshi over alleged Lawful Sports Betting Act violation
Michigan Attorney General Dana Nessel filed a lawsuit against prediction market operator Kalshi for allegedly offering online sports betting without authorization from the Michigan Gaming Control Board.
The lawsuit, filed in the 30th Judicial Circuit Court, claims that Kalshi violated the state's Lawful Sports Betting Act by allowing Michigan residents to participate in sports betting under the form as trading event contracts.
"By virtue of offering its internet sports betting operation to Michigan residents, Kalshi induces a person to reasonably believe that its internet sports betting operation is legal in the State of Michigan when in fact such conduct is illegal," read the lawsuit. "Despite calling its product 'event contracts,' consumers are placing wagers on the outcome of sporting events."
The lawsuit added, "Kalshi is facilitating gambling in Michigan without all the required responsible gambling features mandated for licensed internet sports betting, and without any oversight by the MGCB as to whether its measures are effective, which is exposing residents of Michigan to gambling addiction with few safeguards."
Kalshi has not yet returned CBS News Detroit's request for comment.
Meanwhile, Nessel is asking the court to issue a permanent injunction against the company and prohibit it from advertising or conducting its alleged online sports betting in Michigan.
"Corporations cannot circumvent state gaming laws," Nessel said in a statement. "My office will hold those who sidestep Michigan's consumer protections accountable and ensure that betting in our state remains lawful, fair and subject to the oversight our residents expect and deserve."
Online sports betting was legalized in Michigan in January 2021, more than a year after the Lawful Sports Betting Act went into effect in December 2019.
It is not the first time a state recently scrutinized Kalshi for alleged online gambling. The New York State Gaming Commission sent the company a cease and desist letter for allegedly offering sports betting without a state license. In that case, Kalshi filed a lawsuit against the state, claiming that it is a trading platform.
