Woofun AI reports that Ingham County Circuit Court Judge Rosemarie Aquilina issued a temporary restraining order blocking Kalshi from accepting sports wagers from Michigan residents. The court mandated a penalty of $120,000 for every day the platform fails to enforce geolocation restrictions, with the order expiring on July 13. Judge Aquilina cited the risk of irreparable harm to residents being 'exploited by Kalshi's sports betting operation masquerading as an investment opportunity.'

This legal action marks the second US state to enforce a court-ordered ban on Kalshi's sports contracts, following a similar temporary prohibition in Nevada earlier in March. The regulatory pressure intensified on June 17 when Kentucky filed suit against five prediction market platforms, including Kalshi and Polymarket, alleging they operate unlicensed sports betting venues. More than a dozen other states have subsequently initiated legal proceedings against prediction market operators.

The conflict highlights a jurisdictional dispute between state authorities and the US Commodity Futures Trading Commission (CFTC), which has sued several states claiming exclusive federal authority over regulated event contracts. Despite these legal challenges, sports betting activity on prediction markets surged following the FIFA World Cup kickoff on June 11. Daily taker volume, representing contracts bought or sold by traders filling existing orders, hit a record $713 million on June 20.

Woofun AI data shows monthly sports betting volume became the leading category on the two largest platforms, rising 40% to $9.5 billion on Kalshi and 175% to $5.3 billion on Polymarket. A June 11 Bernstein report projected the 2026 FIFA World Cup would generate over $3 billion in incremental sports betting handle and between $5 billion and $10 billion in additional consumer prediction market volume. The World Cup winner contract alone has already driven over $3.5 billion in trading volume on Polymarket.

This surge in wagering activity has positioned Polymarket as a primary onboarding layer for new cryptocurrency users, with approximately 60% of World Cup bettors interacting with the blockchain for the first time during their entry into prediction markets. The convergence of massive trading volumes and aggressive state litigation signals a critical inflection point for the industry's regulatory future.