TL;DR: Coinbase Financial Markets has agreed to stop offering new sports-related event contracts to Michigan customers by October 10 and close remaining open positions by the same deadline. Michigan agreed not to pursue enforcement while Coinbase complies, but the wider legal fight over whether states can regulate federally registered event contracts remains unresolved.
Coinbase is pulling sports prediction contracts out of Michigan while its legal battle with the state continues.
The Michigan Gaming Control Board said Coinbase Financial Markets has agreed to stop offering new sports-related event contracts to residents by midnight Eastern Time on October 10.
Any remaining open customer positions must also be closed by that deadline.
The agreement does not settle the underlying argument.
Coinbase has maintained that event contracts offered through federally regulated designated contract markets fall under federal commodities oversight rather than state gambling law.
Michigan sees the products differently.
State regulators have argued that sports contracts amount to wagering and therefore cannot be offered to Michigan residents without complying with the state’s gaming rules.
Under the new stipulation, Michigan has agreed not to take enforcement action against Coinbase as long as the company complies with the restrictions while related court appeals continue.
That leaves the legal question intact.
Coinbase is not the only platform caught in the dispute.
Michigan has also reached an agreement with Robinhood and obtained a preliminary injunction involving Kalshi. Appeals connected to Robinhood, Polymarket and Kalshi are moving through the courts alongside the wider debate over prediction markets.
The conflict has grown quickly because event contracts have expanded far beyond elections and macroeconomic outcomes.
Sports markets put the industry directly against state gaming regulators that already supervise conventional sportsbooks.
From the platform perspective, the contracts are federally regulated derivatives.
From the state perspective, asking users to put money on whether a team wins looks a lot like sports betting regardless of the legal wrapper used to create the market.
Michigan Attorney General Dana Nessel and the gaming board have taken an aggressive position on that distinction.
Coinbase had sought a preliminary injunction against the state but was denied in August. Its appeal remains pending.
The temporary agreement now removes the immediate enforcement risk while the courts consider the larger jurisdictional question.
Non-sports products are not the focus of the deal.
That matters because Coinbase’s push into event markets is broader than sports and forms part of the company’s attempt to become a multi-asset trading platform rather than a crypto exchange alone.
The Michigan fight shows the cost of that expansion.
Prediction markets can sit simultaneously inside commodities law, gambling law and financial regulation depending on how a contract is structured and what it references.
Platforms are discovering that federal registration does not necessarily stop individual states from asserting their own authority.
For Michigan users, the practical outcome is much simpler than the legal argument.
Sports contracts are going away by October 10.
Whether they stay away permanently will be decided somewhere else.
