Coinbase Agrees to Halt Sports Event Contracts in Michigan

Under the Michigan Gaming Control Board’s official agreement announcement, Coinbase will cease offering new sports-related contracts in the state, including products traded on KalshiEX and other designated contract markets.

Michigan, in return, will not pursue enforcement against Coinbase while the company remains compliant with the stipulation and the associated litigation continues. The arrangement follows a similar agreement with Robinhood and a state-court preliminary injunction affecting Kalshi.

MGCB Executive Director Henry Williams said:

Coinbase joining Robinhood and Kalshi in stepping back from these unlicensed sports contracts underscores Michigan’s commitment to enforcing its gaming laws.

The development is particularly relevant for intermediaries because Michigan’s approach does not focus solely on the exchange listing a sports event contract. Coinbase provides customers access to contracts traded through federally designated markets, illustrating how state enforcement can also affect brokers and distribution platforms that connect consumers to those products.

The central legal question remains whether event contracts regulated through the Commodity Futures Trading Commission can also be subjected to state gambling laws.

Coinbase previously sought preliminary protection against Michigan enforcement, but a federal court denied that request in August. Its appeal remains pending before the Sixth US Circuit Court of Appeals and has been stayed while related cases involving Kalshi, Robinhood and Polymarket move forward. The Michigan agreement preserves Coinbase’s legal arguments rather than requiring the company to concede that its contracts constitute gambling.

The jurisdictional issue has become increasingly fragmented across the US. In September, the Sixth Circuit ruled against Kalshi in its dispute with Ohio and Tennessee, finding that the sports contracts at issue were not swaps within the Commodity Exchange Act framework and rejecting federal preemption arguments.

Other courts have reached different conclusions. Most recently, an Illinois federal court granted Kalshi and Coinbase partial protection from state restrictions, creating a contrasting result in the Illinois prediction-market dispute.

For B2B businesses, the Michigan settlement shows that prediction-market compliance risk increasingly extends beyond the operator that originates or lists a contract.

Brokerages, financial platforms, and other distributors may need state-specific controls that can identify where sports event contracts can legally be offered. That can involve geolocation, product availability rules, customer-position management and procedures for rapidly withdrawing markets when courts or regulators intervene.

The issue matters because the federal framework is still developing. The CFTC has continued work on the legal treatment of event contracts, while proposed measures addressing the definition of swaps have moved into White House regulatory review.

Until judicial or regulatory clarity improves, platforms operating nationally may face different requirements depending on the customer’s state.

Michigan now has agreements or court orders affecting Coinbase, Robinhood and Kalshi, demonstrating that its enforcement strategy is moving across multiple layers of the prediction-market ecosystem.

For licensed sportsbook operators, the dispute also has competitive implications. Michigan maintains that sports wagering should be conducted through businesses operating under its state licensing and consumer-protection framework. At the same time, prediction-market companies continue to argue that federally regulated event contracts fall under a different legal structure.

Coinbase’s agreement therefore represents more than a temporary product withdrawal. It highlights the operational consequences of the unresolved state-versus-federal dispute. It shows why prediction-market businesses increasingly need jurisdiction-specific compliance strategies while the courts determine where regulatory authority ultimately sits.