Coinbase Will Halt Sports Prediction Contracts In Michigan After State Deal

What happened

Coinbase Financial Markets agreed to stop offering new sports-related event contracts to Michigan residents by midnight Eastern Time on October 10, and to close any remaining open customer positions by that deadline. The Michigan Gaming Control Board announced the agreement on Oct. 7.

The deal does not settle the underlying argument. Coinbase has argued that event contracts traded on federally regulated designated contract markets fall under federal commodities oversight, not state gambling rules. State regulators counter that sports contracts are wagering and cannot be offered to Michigan residents unless the company follows the state's gaming rules. Michigan has agreed not to take enforcement action against Coinbase as long as it complies while related court appeals continue.

Coinbase is the third platform to stop such offerings in the state. Robinhood agreed in September to stop new sports contracts and close remaining positions by Oct. 9. Kalshi is under a state-court preliminary injunction that requires it to geofence Michigan users.

Why it matters

The temporary agreement removes the immediate enforcement risk while the courts consider the larger jurisdictional question. Coinbase's push into event markets goes beyond sports and forms part of its attempt to become a multi-asset trading platform rather than a crypto exchange alone, so the Michigan fight carries a cost for that expansion.

The dispute also shows how prediction markets can fall under commodities law, gambling law and financial regulation at the same time, depending on how a contract is built and what it references. Federal registration, in practice, has not stopped individual states from asserting their own authority.

What the data shows

• Coinbase sought a preliminary injunction against Michigan but was denied in August, and its appeal is pending.
• A federal judge in Chicago, in a case Coinbase leads, blocked parts of Illinois' gambling law on Oct. 2.
• The Ohio Casino Control Commission told Coinbase it was operating online sports gaming and gave it 14 days to confirm in writing that it had stopped.
• The Sixth Circuit ruled against Kalshi in Ohio and Tennessee last month.
• Appeals involving Robinhood, Polymarket and Kalshi are moving through the courts alongside the broader debate over prediction markets.

Background

• Michigan has also settled with Robinhood and won a preliminary injunction against Kalshi.
• Michigan Attorney General Dana Nessel said: "Whether by agreement or court order, we intend to bring all sports betting into compliance with the law."

What is still unclear

• The agreement does not settle whether states can regulate CFTC-registered event contracts as gambling.
• It is not clear whether sports contracts will stay away from Michigan users permanently.
• Coinbase had not commented publicly on the agreement at the time of writing.

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