You Can Win Money Predicting The Outcome Of the Game . . . And That's Not Gambling?

(Source: MIRS.news, Published 03/05/2026) Michigan’s attempt to enforce its gambling laws has triggered a growing legal fight involving the state, several financial trading companies and the federal government’s authority over “prediction markets.”

Michigan Attorney General Dana Nessel filed a lawsuit Tuesday in Ingham County Circuit court against KalshiEx LLC, arguing the company is offering illegal sports betting to Michigan residents.

Nessel’s lawsuit claims Kalshi is violating the state’s Lawful Sports Betting Act by allowing users to place wagers on sports outcomes through online “event contracts,” as opposed to registering with the Gaming Control Board as a gambling entity.

“Corporations cannot circumvent state gaming laws,” Nessel said in a statement. “My office will hold those who sidestep Michigan’s consumer protections accountable.”

The lawsuit asks the court to declare Kalshi’s operation a public nuisance and order the company to stop offering or advertising sports-related betting in Michigan.

Kalshi operates a type of financial marketplace known as a prediction market. Instead of placing traditional bets, users buy and sell “event contracts,” which are financial products tied to whether a specific event will occur — such as the outcome of a sporting event.

While Michigan officials say the activity amounts to unlicensed sports betting, companies operating in the space argue the contracts fall under federal financial regulations.

That disagreement led two companies to file their own lawsuits Wednesday in the U.S. District Court for the Western District of Michigan.

QCX LLC, which operates the prediction platform Polymarket US, and Robinhood Derivatives LLC are seeking court orders blocking Michigan from enforcing state gambling laws against federally regulated prediction markets.

QCX argued in its complaint that Michigan is trying to regulate markets that are overseen by federal authorities. The company says the Commodity Futures Trading Commission has “exclusive jurisdiction” over derivatives trading under the federal Commodity Exchange Act.

Prediction markets allow users to trade contracts based on real-world outcomes — including political events, economic indicators or sports results — with the contracts’ value changing based on the perceived likelihood of the event happening.

QCX’s lawsuit argues that Michigan’s enforcement efforts could force the company to shut down operations in the state and expose it to civil or criminal penalties.

Federal regulators have also weighed in on the broader dispute. Michael Selig recently wrote that the CFTC — not individual states — has authority over prediction markets and derivatives trading.

“The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction,” Selig wrote in a February editorial.

The lawsuits set up a broader legal clash over whether prediction markets tied to sports outcomes should be treated as federally regulated financial products or as sports betting subject to state gambling laws.