CFTC blocks Kalshi from canceling Michigan users' sports event contract positions
2026-07-16 04:33
Odaily Planet Daily News The U.S. Commodity Futures Trading Commission (CFTC) on Tuesday suspended an emergency rule by Kalshi, preventing it from forced liquidation of open sports event contracts held by some Michigan residents, and requiring Kalshi to fulfill related transactions through normal procedures.
Kalshi submitted the emergency rule on July 12 after the Ingham County Circuit Court in Michigan orally requested it to close some positions and, in a letter dated July 6, specified that the relevant transactions must be voided, canceled, and refunded.
The dispute began after Michigan Attorney General Dana Nessel and the Michigan Gaming Control Board sued Kalshi in March, alleging its sports event contracts constitute unlicensed internet sports betting. Kalshi argues the products are federally regulated derivatives under the Commodity Exchange Act.
The CFTC stated that allowing Kalshi's emergency rule to take effect could undermine confidence that completed derivatives transactions will be honored and cause significant market disruption. CFTC Chairman Michael Selig said state governments cannot force designated contract markets to violate their obligations.
Kalshi submitted the emergency rule on July 12 after the Ingham County Circuit Court in Michigan orally requested it to close some positions and, in a letter dated July 6, specified that the relevant transactions must be voided, canceled, and refunded.
The dispute began after Michigan Attorney General Dana Nessel and the Michigan Gaming Control Board sued Kalshi in March, alleging its sports event contracts constitute unlicensed internet sports betting. Kalshi argues the products are federally regulated derivatives under the Commodity Exchange Act.
The CFTC stated that allowing Kalshi's emergency rule to take effect could undermine confidence that completed derivatives transactions will be honored and cause significant market disruption. CFTC Chairman Michael Selig said state governments cannot force designated contract markets to violate their obligations.
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