CFTC Defends Kalshi Trades Amid Michigan Sports Contract Crackdown

"Our gambling laws exist to protect Michiganders from unlicensed, predatory operations, and failing to comply with them carries serious legal consequences," she said.

The CFTC's strongest objection focused on Michigan's attempt to unwind trades that had already been executed. For markets, that is a more serious step than blocking new activity because it challenges the finality of contracts.

Contract certainty is central to exchange-based markets. Traders need to know that once a transaction is executed under the rules of a regulated venue, it will not later be canceled because of a separate state-level order. If one state can force cancellations after execution, other states could attempt similar actions, creating uneven treatment across the same national market.

For prediction market platforms, the ruling offers immediate support against state-level pressure. For state regulators, it raises the stakes in their legal challenge because the CFTC is now actively defending not only platform registration but also the enforceability of trades involving residents in contested states.

The Michigan dispute is one front in a broader legal campaign. The CFTC said it has filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin to protect the jurisdiction it says Congress granted it.

The CFTC has filed lawsuits against nine states. No trial dates have been set.