Meta description: Coinbase agreed to halt Michigan sports event contracts by Oct. 10 as state actions against Kalshi and Robinhood reshape the legal fight.
Tags: Coinbase, Kalshi, Robinhood, Michigan Gaming Control Board, CFTC, Supreme Court
market_platform: none-if-cross-platform
category: Regulation
Coinbase Financial Markets, Inc. has agreed to stop offering new sports-related event contracts to Michigan customers by 12:00 a.m. Eastern time on October 10, 2026, and to close any remaining open customer positions by the same deadline, the Michigan Gaming Control Board said in an October 7 announcement. The deal follows a similar Robinhood agreement and a Michigan state-court injunction against KalshiEX LLC.
The Michigan agreement does not decide the central legal question driving the prediction-markets fight: whether sports event contracts listed on CFTC-regulated designated contract markets are federally regulated derivatives, state-regulated sports wagers, or both. It does, however, remove Coinbase from the Michigan sports-contract market while related Sixth Circuit appeals continue, according to the MGCB release.
What did Coinbase agree to do in Michigan?
Coinbase agreed to stop offering new sports-related event contracts in Michigan, including contracts traded on KalshiEX and other designated contract markets, and to wind down existing customer positions by the October 10 deadline. In exchange, Michigan agreed not to bring enforcement action against Coinbase as long as the company complies and while related appeals proceed in the U.S. Court of Appeals for the Sixth Circuit, the MGCB said.
The stipulation preserves the parties’ legal positions. Coinbase has argued in federal court that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over the relevant contracts. Michigan, through Attorney General Dana Nessel and state gaming officials, argues that contracts paying out on sports results fall within state sports betting law when offered to Michigan customers without a state license.
MGCB Executive Director Henry Williams said Coinbase joining Robinhood and Kalshi in stepping back from the contracts showed Michigan’s intent to enforce its gaming laws. Nessel said the state intends to bring sports betting into compliance whether by agreement or court order, according to the same MGCB announcement.
How did Kalshi and Robinhood leave the Michigan sports-contract market?
Kalshi is under a state-court preliminary injunction. On September 1, 2026, Judge Rosemarie Aquilina of the 30th Judicial Circuit Court in Ingham County entered an order barring Kalshi from offering, listing, accepting, or facilitating sports-related event contracts in Michigan while the state case proceeds, according to the signed preliminary injunction order.
The Kalshi order also requires the exchange to use commercially reasonable geolocation steps to prevent Michigan users from accessing sports-related contracts on Kalshi’s designated contract market. The order remains in effect until a final order is issued in the Michigan state case.
Robinhood Derivatives, LLC reached a separate stipulation with Michigan in early September. Under the Robinhood stipulation and order, the company agreed to stop offering new sports-related event contracts in Michigan by the end of September 9, 2026, and to close remaining open Michigan customer positions by October 9. The Robinhood order covers sports contracts traded on any designated contract market, including KalshiEX and Rothera Exchange and Clearing LLC.
The Coinbase agreement follows the same basic structure but uses a deadline one day later than Robinhood’s. Michigan now has a state-court injunction against Kalshi and negotiated stand-down agreements with Robinhood and Coinbase for sports-related event contracts in the state.
What did the federal court say in Coinbase’s Michigan case?
Coinbase sued Michigan officials in December 2025, seeking to block enforcement of state gambling law against its planned offering of sports event contracts to Michigan customers. U.S. District Judge Shalina Kumar denied Coinbase’s motion for a preliminary injunction in an amended August 2026 order in Coinbase Financial Markets Inc. v. Nessel.
Kumar held that Coinbase had not shown a likelihood of success on its preemption theory. The order said Coinbase had not established, at the preliminary-injunction stage, that the sports event contracts at issue were swaps under the Commodity Exchange Act. The court also rejected Coinbase’s impossibility-preemption argument, including Coinbase’s claim that it could not comply with both federal rules and Michigan gambling law.
The court allowed Coinbase’s case for prospective relief against Michigan officials to proceed under the Ex parte Young doctrine, but the denial of a preliminary injunction left Michigan’s enforcement position intact while Coinbase appealed. Coinbase’s Sixth Circuit appeal is now pending in the same regional circuit that has already ruled against Kalshi in related Ohio and Tennessee cases.
Why does the Sixth Circuit matter for Michigan?
The Sixth Circuit hears federal appeals from Michigan, Ohio, Tennessee and Kentucky, and on September 25, 2026, it issued a significant ruling against Kalshi in consolidated Ohio and Tennessee appeals. In KalshiEX LLC v. Schuler, a unanimous panel affirmed the Southern District of Ohio’s denial of a preliminary injunction, vacated a Middle District of Tennessee injunction that had favored Kalshi, and remanded for further proceedings.
The Sixth Circuit held that Kalshi had not shown its sports event contracts were swaps under the Commodity Exchange Act. The panel also said that, even if the contracts were swaps, the CEA did not expressly or impliedly preempt Ohio’s or Tennessee’s gambling laws. That reasoning cuts directly against the core preemption argument Coinbase has pressed in Michigan.
The ruling is not a Michigan order, but it is binding precedent for federal courts in Michigan. That gives state officials more leverage in Sixth Circuit litigation over sports-related event contracts and leaves companies with a steeper path to emergency relief in the region.
Is the Supreme Court already involved?
Yes. Supreme Court review is no longer only a future possibility. New Jersey officials filed a petition for a writ of certiorari on September 2, 2026, asking the Court to review the Third Circuit’s decision in favor of Kalshi in Flaherty v. KalshiEX LLC. The Supreme Court docket, No. 26-299, shows the petition was docketed September 8 and that Kalshi’s response deadline was extended to November 9.
Robinhood also filed a Supreme Court petition on September 10, 2026, from the Ninth Circuit’s Nevada case. The docket in No. 26-338, Robinhood Derivatives, LLC v. Dreitzer, lists the petition as filed September 10, docketed September 14, with a response due October 14.
Those petitions put the split over sports event contracts squarely before the Court. The Third Circuit sided with Kalshi against New Jersey, while the Ninth Circuit and Sixth Circuit have allowed state gaming regulators to proceed against sports-related event contracts. The Coinbase and Robinhood Michigan agreements are written against that appellate backdrop, preserving rights while the higher courts sort out the preemption question.
What happens next in Michigan?
The immediate Michigan deadlines are October 9 for Robinhood’s close-out of remaining sports positions and 12:00 a.m. Eastern time on October 10 for Coinbase’s close-out. Kalshi remains subject to the September 1 Ingham County preliminary injunction unless that order is dissolved or replaced by a later state-court ruling.
After the wind-downs, the larger fight moves back to the appellate courts. Coinbase’s Michigan appeal remains pending in the Sixth Circuit, while the Supreme Court has live cert petitions in the New Jersey Kalshi case and the Nevada Robinhood case. The next dated milestone is October 14, 2026, the current response deadline in Robinhood’s Supreme Court petition.
