Key Takeaways
- Coinbase will end sports event contracts in Michigan and close open positions by 12 a.m. ET on Oct. 10.
- Kalshi and Robinhood have already stepped back; Kalshi faces a $500,000 daily fine if it breaks a court order.
The Third Platform Shut Out of Michigan
Coinbase customers in Michigan have until the first minute of Saturday, Oct. 10, to trade sports prediction markets on the crypto exchange. Under an agreement announced by the Michigan Gaming Control Board on Oct. 7, Coinbase Financial Markets will stop offering new sports-related event contracts, including those traded on Kalshi, and close out any remaining customer positions by 12 a.m. ET that day.
“Our efforts, alongside the Gaming Control Board, are making a clear impression on the executives of the illegal sports betting industry, and we’re glad to reach yet another agreement that protects Michigan residents,” Michigan Attorney General Dana Nessel said. “Whether by agreement or court order, we intend to bring all sports betting into compliance with the law.”
Henry Williams, the board’s executive director, said operators are “halting these activities because they face significant legal consequences for continuing to offer them in our state.” Coinbase had not commented publicly on the agreement at the time of writing.
Coinbase is the third platform to stop such offerings in the state. Robinhood agreed in September to stop new sports contracts and close out remaining positions by Oct. 9. Kalshi is under a state-court preliminary injunction that requires it to geofence Michigan users, with violations carrying a $500,000 daily fine.
In exchange, Michigan will not take enforcement action against Coinbase while it complies and while related appeals play out at the Sixth Circuit, which ruled against Kalshi in Ohio and Tennessee last month. A federal judge denied Coinbase a preliminary injunction against Michigan in August, and its appeal is on hold. The deal does not settle whether states can regulate CFTC-registered event contracts as gambling.
Coinbase’s court record elsewhere is mixed. A Connecticut judge denied its bid for an injunction in August, while a federal judge in Chicago, in a case Coinbase leads, blocked parts of Illinois’ gambling law on Oct. 2. In a cease-and-desist letter dated the same day, the Ohio Casino Control Commission told Coinbase, “Plainly stated, Coinbase is operating online sports gaming,” and gave it 14 days to confirm in writing that it has stopped. Polymarket, Robinhood, Gemini, and six other firms received similar letters in the state.
