Prediction Markets in Michigan

Quick Verdict: Available, But Under Active State Challenge

Michigan is one of the most active enforcement battlegrounds for prediction markets in 2026. On March 5, 2026, Michigan Attorney General Dana Nessel filed a lawsuit against Kalshi, alleging the platform's sports event contracts violate the Michigan Lawful Sports Betting Act of 2019. As of April 2026, no court order has halted Kalshi's operations in Michigan, and the platform — along with Robinhood, DraftKings Predictions, FanDuel Predicts, and Polymarket US — remains accessible to Michigan residents over 18.

The Michigan Gaming Control Board↗ (MGCB) had previously, in April 2025, raised concerns directly to the CFTC about sports event contracts being offered to Michigan residents without state licensure. Notably, the MGCB stopped short of issuing its own cease-and-desist orders against Kalshi at that time — and the agency's broader April 2026 cease-and-desist sweep targeted 45 offshore gambling operators (BetOnline, SportsBetting.ag, Americas Card Room, etc.), not federally regulated DCMs.

The March 5, 2026 AG Nessel Lawsuit

Attorney General Dana Nessel filed her lawsuit in Michigan state court, naming Kalshi as the defendant. The complaint alleges that Kalshi's sports event contracts — including game winners, spreads, and futures on NFL, NBA, MLB, NHL, and college games — constitute "sports betting" under Michigan's 2019 Lawful Sports Betting Act, and that offering them to Michigan residents without a state license violates Michigan law.

The AG's central legal argument is that the substance of the activity (taking a position on a sporting outcome for money) controls how it should be regulated, regardless of whether the product is structured as a binary contract on a CFTC-regulated exchange. The complaint seeks injunctive relief barring Kalshi from offering sports contracts to Michigan residents, plus civil penalties.

Kalshi's defense, consistent with its position in parallel litigation in Nevada, New Jersey, Maryland, and Arizona, is that its event contracts are federally regulated derivatives under the Commodity Exchange Act↗, and that the CFTC's exclusive jurisdiction over Designated Contract Markets preempts state gambling law. This is the same federal preemption argument that won Kalshi preliminary injunctions in Tennessee and Arizona.

The MGCB's April 2025 CFTC Concerns Letter

Roughly a year before AG Nessel filed suit, the Michigan Gaming Control Board↗ took a different approach: it sent a formal letter to the CFTC raising concerns about sports event contracts being offered to Michigan residents without coordination with state regulators. The MGCB letter argued that prediction market sports contracts undercut Michigan's licensed sportsbook framework, deprive the state of tax revenue, and reduce consumer protections that the state's licensure regime provides (including responsible gaming requirements, mandatory player limits, and AML compliance specific to Michigan).

The MGCB notably stopped short of issuing its own cease-and-desist order against Kalshi or other DCMs at that time. The April 2025 letter signaled state-level concern without invoking direct enforcement authority — leaving the question to federal regulators and, ultimately, to the courts.

The April 2026 MGCB Offshore Crackdown

On April 7, 2026, the MGCB announced it had issued cease-and-desist orders to 45 offshore gambling operators over a four-month period. The targeted sites included BetOnline, SportsBetting.ag, Americas Card Room, True Poker, and 41 other unlicensed offshore platforms. Each operator was given 14 days to stop accepting Michigan customers.

Critically, this enforcement action did not target Kalshi, Robinhood, DraftKings Predictions, FanDuel Predicts, or Polymarket US. The MGCB carefully distinguished between offshore unlicensed sportsbooks (clearly illegal under Michigan law) and federally regulated DCMs (subject to active litigation but not subject to MGCB cease-and-desist orders). This signals that, for now, Michigan's enforcement posture against prediction markets is being channeled through the AG's lawsuit rather than parallel administrative action.

Michigan's Established Mobile Sports Betting Market

Michigan launched mobile sports betting in January 2021 under the 2019 Lawful Sports Betting Act. The market is robust: 15+ licensed mobile sportsbook operators including FanDuel, DraftKings, BetMGM, Caesars, BetRivers, ESPN BET, and Fanatics Sportsbook are live. Michigan generated over $7 billion in mobile sports wagering handle in 2025 and produced approximately $90M in state tax revenue.

This established legal market is a key part of why Michigan has taken a more aggressive enforcement stance than states without legal sports betting (like Georgia or California). The state's argument, in essence, is that prediction markets are competing in a regulated market without bearing the licensing costs, tax burden, or compliance overhead that licensed Michigan sportsbooks must carry.

What Michigan Residents Can Trade Right Now

Despite the active litigation, Michigan residents over 18 currently have access to the full prediction market catalog:

• Sports event contracts on Kalshi, Robinhood, DraftKings Predictions, FanDuel Predicts, Fanatics Markets, and (where applicable) other DCMs — covering NFL, NBA, MLB, NHL, college football, college basketball, and major futures
• Politics contracts on Kalshi and Polymarket US — including 2026 midterms (Michigan has competitive Senate and gubernatorial races), 2028 presidential election, and congressional control
• Economic and macro contracts — CPI, Fed decisions, jobs reports
• Crypto and culture — Bitcoin price targets, ETF approval, awards shows, box office

Michigan residents who use a licensed Michigan sportsbook (FanDuel, DK, BetMGM, etc.) for traditional bets and a CFTC-regulated DCM for event contracts and non-sports markets are operating in entirely separate regulatory regimes and tax categories.

Risk Considerations for Michigan Traders

Until the AG Nessel lawsuit is resolved, Michigan traders should understand a few risks:

1. A future court order could halt Kalshi sports contracts in MI. If a Michigan state court grants the AG injunctive relief and a federal court does not preempt that order, Kalshi (and possibly other DCMs) could be forced to restrict Michigan-resident accounts. This has not happened as of April 2026.
2. Open positions could be affected. If a platform is forced to suspend MI accounts mid-event, contracts may be settled at last traded price, voided, or held until resolution per the platform's terms.
3. Tax obligations apply regardless. Michigan state income tax is a flat 4.25%. Net gains are reportable whether the platform issues a 1099 or not.
4. VPN use does not work and is prohibited. Geofencing is enforced by IP and device location. Using a VPN to bypass MI restrictions (if they are imposed) violates platform terms and can result in permanent account closure and fund forfeiture.

Best Platforms for Michigan Residents in 2026

Kalshi remains our top pick for Michigan despite the active litigation, because the platform offers the deepest catalog and lowest fees, and is leading the federal preemption defense. Michigan traders should monitor the AG Nessel suit but can currently use the platform fully.

Polymarket US is not named in the Nessel suit and offers strong politics and crypto liquidity for Michigan residents who want to focus on non-sports event contracts.

Robinhood offers Kalshi-routed contracts inside the familiar Robinhood app — same underlying contracts, same litigation risk, but a simpler interface for existing Robinhood brokerage users.

DraftKings Predictions and FanDuel Predicts are interesting in Michigan because both companies also operate licensed Michigan sportsbooks. For users who prefer the sportsbook-style interface, the Predictions products give MI residents access to combo (parlay) contracts and futures that complement their existing DK/FD sportsbook accounts.

Outlook: A Decision Could Come in 2026

The AG Nessel suit is one of roughly 19 active state-level lawsuits Kalshi is defending in 2026. Federal courts in Tennessee and Arizona have sided with Kalshi on preliminary injunction motions, ruling that the company is likely to succeed on its federal preemption argument. Federal courts in Nevada and Maryland have ruled against Kalshi on similar motions.

The question for Michigan is whether the case stays in state court (Nessel's preferred venue) or is removed to federal court (Kalshi's preferred venue, where preemption arguments have stronger precedent). The procedural fight itself could take months, with substantive rulings on Michigan-resident access likely arriving in the second half of 2026.

In the meantime, Michigan traders have full access to every major US prediction market platform — but should follow the case carefully and avoid parking large balances on a single platform until the legal picture clarifies.