Coinbase Financial Markets Inc. has agreed to stop offering new sports-event contracts to Michigan customers and close remaining open positions by midnight Saturday under an agreement with state regulators, the Michigan Gaming Control Board said.
The deal gives Coinbase a firm deadline to wind down the products in the state. In return, Michigan will hold off on enforcement action while Coinbase complies and related appeals continue.
What the agreement requires
The stipulation covers sports-related event contracts traded on Kalshi and other designated contract markets. Coinbase must stop offering new contracts in Michigan and close out any customer positions still open by the deadline.
The agreement does not end the dispute over whether Michigan can regulate event contracts registered with the CFTC as gambling. Instead, it sets an operating restriction for Coinbase while the legal question remains before the courts.
Michigan agreed not to take enforcement action against Coinbase so long as the company follows the terms and the related appeals proceed before the U.S. Court of Appeals for the Sixth Circuit. That protection is conditional: the company must comply with the wind-down, and the settlement does not grant it permission to keep offering sports contracts in Michigan.
The Michigan Gaming Control Board’s announcement says the stipulation preserves the parties’ rights, obligations and defenses pending a final ruling from the Sixth Circuit or the U.S. Supreme Court.
Michigan’s enforcement push
The MGCB characterizes the targeted products as sports wagering offered by unlicensed operators through prediction markets. The Coinbase agreement follows a similar deal with Robinhood Derivatives LLC and a state-court preliminary injunction against KalshiEX LLC.
Coinbase’s own appeal stems from a federal court’s denial of its request for a preliminary injunction in August. That appeal remains pending before the Sixth Circuit and has been stayed while related appeals involving Robinhood, Polymarket and Kalshi are resolved.
The Michigan action against Kalshi is part of the state’s broader effort to restrict sports-event contracts offered to residents. A Michigan court order halted Kalshi sports wagering, while Coinbase’s activity in the state has also drawn scrutiny over how the company handles these products, including a Michigan market error involving Coinbase and Kalshi.
Michigan Attorney General Dana Nessel said the state intends to bring sports betting into compliance with its laws, whether operators agree to restrictions or courts impose them. The state has also pursued concerns around prediction markets through the Gaming Control Board, including its broader scrutiny of Kalshi.
The legal question remains open
The settlement changes Coinbase’s immediate operating position in Michigan, but it does not decide whether the state can apply its gambling laws to CFTC-registered event contracts. The company must stop taking new sports-related positions and close existing ones by midnight Saturday, even as its appeal remains unresolved.
Any final ruling from the Sixth Circuit or Supreme Court could clarify the parties’ rights and defenses. Until then, the agreement requires Coinbase to withdraw its sports-event contracts from Michigan while preserving the underlying legal dispute.
