Coinbase Financial Markets will stop offering new sports-related event contracts to Michigan customers by 12 a.m. Eastern time on Oct. 10. It must also close all remaining customer positions by that deadline under an agreement with the state.
The Michigan Gaming Control Board said the negotiated deal covers contracts traded on KalshiEX and other designated contract markets. In return for compliance, Michigan agreed not to bring enforcement action against Coinbase while related appeals continue before the U.S. Court of Appeals for the Sixth Circuit.
The arrangement is temporary and does not settle the central legal question of whether Michigan may regulate CFTC-registered event contracts as gambling. It preserves the parties’ rights, obligations and defenses pending a final Sixth Circuit ruling or a decision by the U.S. Supreme Court. Coinbase’s request for a preliminary injunction was denied in August, and its appeal is stayed while related appeals involving Robinhood, Polymarket and Kalshi are resolved.
Michigan has framed the action as part of a 2026 campaign against unlicensed operators offering sports-wagering products described as federally regulated prediction markets. The state previously reached a nearly identical agreement with Robinhood Derivatives, which was due to close its remaining Michigan sports-contract positions on Oct. 9, and obtained a preliminary injunction against KalshiEX. The board said Michigan had now secured agreements or court orders stopping sports-related event contracts from all three companies.
Michigan’s Lawful Sports Betting Act defines internet sports betting as offering or conducting sports betting online. Its definition of sports betting includes exchange betting, along with single-game wagers, parlays, in-game betting and other types of bets. The attorney general’s office and the gaming board said they were working jointly to ensure sports wagering is offered only by properly licensed and regulated operators.
The dispute sits within conflicting federal appellate views of prediction-market regulation. According to Courthouse News, the Sixth Circuit held in April 2025 that Kalshi’s sports contracts were not swaps under the Commodity Exchange Act and that state sports-betting laws would not be pre-empted even if they were swaps. That position aligned with a Ninth Circuit ruling, while a divided Third Circuit panel reached the opposite conclusion in a case involving New Jersey law. New Jersey had asked the Supreme Court to review the Third Circuit decision, though the court had not decided whether to take the case when Courthouse News reported the development.
