Coinbase has agreed to pause its sports-related prediction market offerings in Michigan, becoming the third major platform to face a halt in the state. The agreement follows actions involving Kalshi and Robinhood, but it does not settle the larger fight over whether sports event contracts are financial products or sports bets.
The Michigan Gaming Control Board announced the agreement. Coinbase Financial Markets, Inc. must stop offering new sports-related event contracts to Michigan customers and close out remaining open customer positions by 12:00 a.m. Eastern time on October 10. That deadline falls at the start of Saturday—not at the end of the day.
"Coinbase joining Robinhood and Kalshi in stepping back from these unlicensed sports contracts underscores Michigan’s commitment to enforcing its gaming laws,” said MGCB Executive Director Henry Williams. “Operators are halting these activities because they face significant legal consequences for continuing to offer them in our state.”
For customers, the immediate result is a shutdown of these sports contracts through Coinbase in Michigan. For regulators and prediction market companies, it is another step in a legal dispute that remains unresolved.
What the Coinbase Michigan Agreement Requires
The agreement covers sports-related event contracts offered through Coinbase, including contracts traded on KalshiEX and other designated contract markets. Its main terms are:
- Coinbase must stop offering new sports-related contracts to Michigan customers by the October 10 deadline.
- It must close out any remaining open customer positions by that same deadline.
- Michigan will hold off on enforcement against Coinbase as long as the company complies and related appeals continue before the U.S. Court of Appeals for the Sixth Circuit.
- Both sides keep their legal arguments, rights, and defenses.
The agreement is temporary. It does not permanently ban Coinbase from offering these products in Michigan, and it does not mean Coinbase has accepted the state’s view of the law. Any future return will depend on how the legal dispute develops.
The announced restrictions concern sports event contracts. They should not be read as a shutdown of every Coinbase service in the state.
Why Michigan Is Challenging Sports Event Contracts
The dispute turns on one basic question: Does a contract tied to a sports outcome belong under federal financial regulation or state gambling law?
Prediction market operators argue that their products fall under the Commodity Exchange Act and the oversight of the Commodity Futures Trading Commission, or CFTC. They contend that federal authority prevents states from applying their gambling laws to these contracts.
Michigan takes a different position. State regulators say sports-related event contracts function as sports wagering and must comply with Michigan’s gambling rules. Calling a product a “prediction market,” in the state’s view, does not remove its sports betting features.
This disagreement explains why federal registration has not ended the controversy. The companies and regulators disagree not only about who should oversee the products, but also about how the law classifies them.
Coinbase Joins Kalshi and Robinhood
Michigan has now secured agreements or court orders halting sports event contracts offered through Coinbase, Robinhood, and Kalshi. However, the three companies reached that point through different legal paths.
Robinhood Derivatives reached a court-approved agreement announced on September 9, 2026. It agreed to stop offering new sports-related event contracts by the end of that day and close remaining customer positions by October 9. Like Coinbase’s agreement, Robinhood’s deal preserved both sides’ legal positions while the appeals continued.
Ironically, Robinhood was beginning to expand its operations.
Kalshi, by contrast, was blocked from offering sports-related contracts in Michigan through court action. Its restrictions are part of its continuing legal battle with the state, rather than the same type of voluntary agreement announced for Coinbase.
The distinction matters. These developments have restricted access to sports contracts in Michigan, but they do not represent three final decisions resolving every company’s claims.
What Happened in Coinbase’s Earlier Court Challenge?
Before reaching the agreement, Coinbase tried to obtain a preliminary injunction—a temporary court order that would have blocked state enforcement while its lawsuit proceeded.
A federal court denied that request in August 2026. U.S. District Judge Shalina Kumar found that Coinbase had not shown it was likely to succeed on its argument that federal commodities law displaced Michigan’s authority over the sports contracts.
Coinbase appealed. According to the Michigan Gaming Control Board, that appeal is pending before the Sixth Circuit, but proceedings have been put on hold while related appeals involving Robinhood, Polymarket, and Kalshi move toward resolution.
The denial of temporary protection was a setback for Coinbase. It was not, by itself, a final resolution of the entire lawsuit.
Why the Sixth Circuit Ruling Matters
A recent Sixth Circuit ruling in cases involving Ohio and Tennessee strengthened the states’ position in the broader prediction market dispute.
The appeals court found that Kalshi had not shown its sports event contracts qualified as “swaps,” a financial category central to its federal-regulation argument. The court also concluded that the Commodity Exchange Act did not prevent Ohio and Tennessee from enforcing the gambling laws at issue.
That decision allowed enforcement in those states while litigation continued. It also created a less favorable legal setting for platforms advancing similar arguments in Michigan. However, the Coinbase agreement itself still leaves the underlying Michigan dispute unresolved.
The Supreme Court may ultimately decide.
What Michigan Customers Need to Know
The key date for Coinbase customers is October 10, 2026, at 12:00 a.m. Eastern time. By then, Coinbase must stop offering new sports contracts to Michigan customers and close any remaining open positions covered by the agreement.
The state’s announcement sets the deadline, but it does not explain the detailed process for closing each customer’s position. Customers should not assume the announcement alone tells them the exact timing, price, or account treatment of an individual closeout.
The larger issue remains before the courts: whether these sports contracts can operate under federal commodities regulation without also meeting state gambling requirements. Until that question is resolved, Coinbase’s Michigan pause is a temporary restriction—not a final answer about the future of sports prediction markets.
