Kalshi pays wrong winners in $18.6 million Michigan market

Kalshi prematurely settled its Western Michigan versus Michigan market after the clock reached zero. The market had traded $18.6 million. Kalshi paid traders who backed Western Michigan. The exchange then reversed those payouts. Kalshi reimbursed traders who had backed Michigan. Kalshi paid the Michigan holders last. Michigan trailed 12-7 after an incomplete Hail Mary attempt. Officials reviewed the play and ruled that a Western Michigan defender had touched the ball from out of bounds. One second was restored to the clock. Bryce Underwood then threw a 47-yard touchdown to JJ Buchanan. Michigan won 13-12. Kalshi had highlighted a $2,265 Western Michigan position during the game. That position stood to pay $93,201. The result that Kalshi eventually paid out on remains disputed. NBC rules analyst Terry McAulay questioned how officials arrived at one second. McAulay said the ball was not close to touching a player when the clock reached zero. BeInCrypto previously flagged a similar failure in July. Coinbase pushed an AI-generated World Cup result to users before kickoff. Coinbase routes its prediction product through Kalshi. A Michigan judge barred Kalshi from offering sports contracts inside the state on September 1. The order carries a $500,000 daily penalty. The exchange misfired on the Michigan football market five days later. Kalshi fixed the payouts within hours.