Coinbase agrees to halt Michigan sports event contracts

Coinbase Financial Markets agreed to halt new sports-related event contracts for Michigan customers from 12 a.m. Eastern time on Oct. 10 and to close all remaining customer positions by the same deadline.

The agreement with the Michigan Gaming Control Board pauses enforcement while litigation continues, rather than deciding whether the state can regulate the contracts as gambling. Michigan will not take enforcement action against Coinbase during the appeals process provided the company complies with the stipulation.

The arrangement covers sports-related contracts traded on KalshiEX and other designated contract markets. It preserves both sides’ rights, obligations and legal defenses pending a final decision by the U.S. Court of Appeals for the Sixth Circuit or the U.S. Supreme Court.

Coinbase’s appeal follows an August denial of its request for a preliminary injunction. The appeal is before the Sixth Circuit but has been stayed while related appeals involving Robinhood, Polymarket and Kalshi proceed. Coinbase had filed its federal case against Michigan Attorney General Dana Nessel and other defendants in December 2025, seeking relief under federal commodity-exchange regulation and a constitutional claim involving state law.

The central dispute is whether sports-related event contracts are federally regulated financial products overseen by the Commodity Futures Trading Commission or sports bets subject to Michigan gambling law. Coinbase and Kalshi contend that the products are regulated event contracts, while Michigan officials say they must comply with state sports-betting requirements.

Michigan has now secured agreements or court orders stopping sports-related event contracts from Kalshi, Robinhood and Coinbase. Michigan had already reached a similar accord with Robinhood, as we reported in September; Robinhood agreed to stop offering new sports contracts and wind down open positions by Oct. 9.

MGCB Executive Director Henry Williams said Coinbase’s decision to join Robinhood and Kalshi in stepping back showed the state’s commitment to enforcing its gaming laws. Attorney General Dana Nessel said Michigan intended to bring all sports betting into compliance with state law, whether through agreements or court orders.

The conflict extends beyond Michigan. A coalition of 44 state attorneys general has argued that the CFTC lacks authority over sports-related event contracts, while the agency and prediction-market platforms maintain that the contracts are swaps regulated by the commission. The CFTC issued a first draft of a proposed rule on prediction markets in June that focused heavily on sports-related contracts.