Kalshi had to undo payouts on a college football prediction market after declaring Western Michigan the winner against Michigan before officials had actually finished deciding the game.
The heavily traded “Western Michigan vs. Michigan” market drew about $18.6 million in trading volume, according to reports from CNN correspondent Marshall Cohen and NBC Sports. Kalshi first paid contracts based on a Western Michigan victory, then reversed those transactions and ultimately paid traders holding the winning Michigan contracts.
“We corrected the result to a Michigan win, making sure all Kalshi customers got paid out correctly,” Kalshi said in a statement shared by sports betting reporter Bill Speros.
No. 16 Michigan was trailing 12-7 when quarterback Bryce Underwood threw an apparent final Hail Mary. The pass fell incomplete and the clock showed zero, sending Western Michigan into celebrations.
Officials then reviewed the play. They ruled Western Michigan’s Micah Davis had touched the ball after jumping from out of bounds while one second remained. The Big Ten later said Davis “started his jump from an established out-of-bounds position” and made contact before time expired.
That decision handed Michigan another snap. Underwood found JJ Buchanan for a 47-yard Hail Mary touchdown, completing a 13-12 Michigan victory.
“One for the history books right here,” Michigan coach Kyle Whittingham said afterward.
The restored second remained disputed, with broadcast footage appearing to show zero before Davis touched the ball. Western Michigan sought clarification but said it would not appeal.
Michigan early market payout exposes Kalshi settlement risks
Kalshi, meanwhile, had already treated Western Michigan as the winner. Cohen reported that the company acknowledged it had “wrongly and prematurely settled” the market. It clawed back those payouts, restored funds to traders initially marked as losers and paid Michigan contract holders. NBC Sports reported the same sequence.
One customer later posted an email attributed to Kalshi that said: “Yesterday evening the Western Michigan vs Michigan market was initially settled to the wrong outcome.” It added that payouts were reversed and the market “re-settled to the correct result.” Another user claimed that some were given $50 as compensation.
The episode follows another Kalshi controversy over how prediction contracts are resolved. Earlier in 2026, its market on whether Iran’s Supreme Leader Ali Khamenei would leave office caused confusion after his reported death. Kalshi said its rules contained a death carveout requiring settlement using the last traded price rather than automatically resolving the contract YES. The company later reimbursed fees and net trading losses after users complained about how those rules had been understood.
Both episodes highlight the same pressure point: prediction markets need clear rules for deciding not only what counts as an outcome, but when that outcome is final.
NBC Sports’ Mike Florio summed up the Michigan episode with a familiar warning: “It ain’t over ’til it’s over.”
For sports contracts, Michigan’s extraordinary final second showed why rapid settlement carries real risk. A market can look finished, traders can get paid and the apparent result can still change before the game officially ends.
ReadWrite has reached out to Kalshi for comment.
Featured image: Michigan Football via X
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