CFTC ordered Kalshi to defy Michigan court's trade-cancellation order, invoking emergency power unused in 46 years

On July 14, 2026, the Commodity Futures Trading Commission stayed an emergency rule change proposed by prediction-market platform KalshiEX, LLC that would have brought Kalshi into compliance with a Michigan state court order. That order, issued by Ingham County Circuit Judge Rosemarie Aquilina after Michigan Attorney General Dana Nessel sued Kalshi, directed the company to temporarily halt its sports-related prediction markets in Michigan and cancel previously executed trades held by Michigan residents, after the judge found residents were "being exploited by Kalshi's sports betting operation masquerading as an investment opportunity." Instead of allowing Kalshi to comply, the CFTC simultaneously invoked its own emergency authority — last used roughly 46 years ago, during the Carter administration's response to the Soviet grain embargo — to order KalshiEX, LLC to fulfill the disputed trades in the ordinary course of business, directly overriding the state court's directive.

CFTC Chairman Michael S. Selig said "a state cannot force a DCM to violate its obligations" and that the commission "will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations." The commission's order was the agency's first direct action against a ruling from a state court; the CFTC has separately filed lawsuits against nine states, including Michigan, over their attempts to regulate prediction markets as gambling. Kalshi said it had already complied with the Michigan court's order before the CFTC's intervention, and a spokesperson for Nessel's office said the attorney general disagreed with the CFTC's characterization of the dispute and its attempt to undermine state efforts to regulate online sports betting.