Michigan Regulators Reach Settlement with Coinbase to Immediately Halt Sports-Event Contracts

Coinbase Financial Markets Inc. has agreed to stop offering new sports-event contracts to Michigan customers by midnight Saturday. The Michigan Gaming Control Board also requires the firm to close out any remaining open customer positions by that deadline.

The settlement is the latest in a series of actions this year against prediction market operators, which the board describes as unlicensed operators offering sports wagering products. Michigan previously reached agreements with Robinhood Derivatives LLC and obtained a preliminary injunction against KalshiEX LLC.

The development with Coinbase joining Robinhood and Kalshi in stepping back from these unlicensed sports contracts underscores Michigan’s commitment to enforcing its gaming laws, as operators halt these activities in the face of significant legal consequences for continuing to offer them in the state.

Coinbase will cease offering sports-related event contracts in Michigan, including those traded on Kalshi and other designated contract markets. In exchange, the state agreed not to take enforcement action against the company while related appeals proceed before the U.S. Court of Appeals for the Sixth Circuit.

The court denied Coinbase’s request for a preliminary injunction in August. Its appeal of that ruling is pending and has been stayed pending resolution of related appeals involving Robinhood, Polymarket and Kalshi. According to reporting by CDC Gaming, the agreement does not resolve the underlying legal dispute over whether Michigan may regulate Commodity Futures Trading Commission-registered event contracts as gambling. It preserves all parties’ rights, obligations, and defenses pending a final ruling from the Sixth Circuit or the U.S. Supreme Court.

Michigan Attorney General Dana Nessel warned that the state intends to bring all sports betting into compliance with the law.

Limits of the Settlement

The deal pauses enforcement but leaves untouched the core conflict between federal commodity rules and Michigan gaming statutes. Prediction market operators maintain their CFTC-registered products fall outside state wagering definitions, yet regulators treat them as unlicensed sports books. This creates ongoing exposure for similar platforms absent clearer judicial lines.

The Sixth Circuit’s Role Ahead

Resolution now rests with appellate review, which will test the reach of state authority over nationally regulated contracts. Operators and investors face continued pressure to align offerings with local mandates or limit exposure in enforcement-focused jurisdictions like Michigan until the boundaries firm up.

Reporting: CDC Gaming

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