CFTC Blocks Kalshi From Voiding Michigan Trades Despite State Court Order

The Commodity Futures Trading Commission (CFTC) has denied Kalshi's request to cancel trades in Michigan, ruling that the operator cannot void contracts despite a state temporary restraining order. The CFTC's decision blocks Kalshi from complying with the Michigan court's demand to cease operations in the state and reverse executed trades.

CFTC Chairman Michael Selig stated that "a state cannot force a DCM to violate its obligations" and that federal law does not permit discrimination against a state's residents. He added that canceling already-executed trades would risk a cascading market effect and undermine contractual certainty. "The Commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations," Selig said.

Kalshi representatives said the company is reviewing the CFTC's order and considering next steps. Michigan regulators, including the Gaming Control Board (MGCB), have not yet commented.

The dispute stems from a temporary restraining order granted by the Ingham County Circuit Court at the request of Michigan Attorney General Dana Nessel, who filed an enforcement action on March 4. Kalshi had attempted to move the case to federal court, but Nessel's motion to remand was granted by the US District Court for the Western District of Michigan on June 25.

Nessel warned that "gambling laws exist to protect Michiganders from unlicensed, predatory operations" and that non-compliance carries serious legal consequences. She praised her office for keeping the case in state court and securing the protective order. The temporary restraining order also requires Kalshi to implement geolocation services in Michigan, though it remains unclear if the operator will comply given the CFTC's ruling.