Coinbase Agrees to Stop Michigan Sports Contracts and Close Open Positions by Saturday

Coinbase will stop offering sports event contracts in Michigan, Kalshi's included, and close its customers' open positions at the same deadline, under an order a federal judge signed on 23 September. Michigan has promised not to prosecute while the appeals run; nobody has conceded the law.

• Coinbase Financial Markets will stop offering new sports-related event contracts in Michigan on any designated contract market, Kalshi included, by 12:00 a.m. Eastern time on Saturday 10 October, under an order US District Judge Shalina D. Kumar signed on 23 September
• It must close Michigan residents' open sports contracts by the same deadline; Robinhood, under its own Michigan agreement, had a month to wind positions down
• In return, Attorney General Dana Nessel and Michigan Gaming Control Board (MGCB) officials will not pursue Coinbase, its affiliates or officers while it complies, and must give 10 days' notice of any breach
• It runs until the Coinbase, Robinhood, Polymarket or Kalshi appeals are finally resolved, including at the Supreme Court, or the state court injunction against Kalshi is dissolved
• The order is without prejudice to either side, records no payment and decides nothing on the merits; the MGCB says Kalshi, Robinhood and Coinbase are now all halted by agreement or court order

A Deal Signed in September and Announced in October

The MGCB announced on Wednesday that Coinbase Financial Markets, Inc. has agreed to stop offering new sports-related event contracts to Michigan customers and to close out open positions, both by 12:00 a.m. Eastern time on 10 October, the moment Friday ends. The agreement is two weeks old: a stipulation and order in Coinbase Financial Markets, Inc. v. Nessel in the US District Court for the Eastern District of Michigan, signed by Judge Shalina D. Kumar on 23 September, according to the docket.

Coinbase agrees to "cease offering new sports-related event contracts in Michigan that are traded on any DCM, including KalshiEX LLC", and to close Michigan residents' sports contracts opened on or before 9 October that remain open and that the customer has not closed voluntarily. It does not say how, or at what price, they will be closed.

In exchange, Nessel, the board members and MGCB Executive Director Henry Williams "will forbear from pursuing any Enforcement Actions" against Coinbase "or its affiliates, employees, officers, directors, or agents" over sports contracts while Coinbase complies. Before acting on a suspected breach they must give written notice, allow 10 days to respond or comply, and meet and confer in good faith. The order records no payment and no admission, and says the agreements are "without prejudice to any party's rights, obligations, or defenses".

The undertaking lasts until the final resolution of the Coinbase, Robinhood or Polymarket appeals, or Kalshi's Ohio and Tennessee appeals, by the US Court of Appeals for the Sixth Circuit or, if certiorari is sought, the Supreme Court, or until the Ingham County court's injunction against Kalshi is dissolved, whichever comes first.

How Coinbase Got Here

Coinbase, a CFTC-registered futures commission merchant that planned to offer Kalshi's event contracts from 2026, according to the court, sued on 18 December 2025, arguing that the Commodity Exchange Act preempts Michigan's gambling laws. On 6 August Kumar denied it a preliminary injunction, finding it had not shown that sports event contracts are swaps or, if they were, that state law is preempted; she called its conflict preemption arguments "in a word, applesauce". Coinbase appealed, the district case was stayed on 21 August, and the MGCB says the appeal has been stayed pending the related appeals.

Robinhood went first. Its stipulation, signed on 4 September by Judge Paul L. Maloney in the Western District of Michigan, required it to stop new sports contracts by the end of 9 September and close open positions by the end of 9 October. Three days earlier an Ingham County judge had granted Michigan a preliminary injunction that raised Kalshi's penalty to $500,000 a day.

Two days after Coinbase's order was signed, the Sixth Circuit ruled 3-0 that Ohio and Tennessee can enforce their gambling laws against Kalshi, in the Kalshi appeals the stipulation names. On 2 October Ohio sent Coinbase one of ten cease-and-desist letters, and the same day a federal judge in Chicago ruled partly for Coinbase and Kalshi against Illinois.

"Whether by agreement or court order, we intend to bring all sports betting into compliance with the law," Nessel said. iGaming Times found no public statement from Coinbase by Wednesday afternoon.

Coinbase Got Less Time Than Robinhood, and More Protection

The two orders share a structure and near-identical termination clauses, but differ where it counts. Robinhood had a month between stopping new contracts and closing old ones; Coinbase must do both at once, so both brokers' Michigan positions end at the same midnight. In return, Coinbase obtained terms Robinhood's order, as filed, does not contain: a 10-day notice and cure period before any enforcement, and forbearance that extends to its affiliates, officers and directors. Those terms protect a corporate group, not a product line, which suggests Coinbase was weighing the risk to the rest of its business. The size of its Michigan sports book is not disclosed.

The Exit Clause Favours Michigan Either Way

The stipulation ends on the final resolution of any one of the appeals, and Kalshi's already has a panel decision against it. If that ruling becomes final, Coinbase's undertaking would, on the order's wording, lapse, but into a circuit that has held such contracts are not swaps and that Ohio's law is not preempted, precedent Michigan could cite in any later enforcement. Coinbase's route back into the Michigan market therefore runs through the Supreme Court or a different result in the Michigan appeals, and resuming before then would put it outside the forbearance.

Michigan Has Built the Model Ohio Is Now Testing

Michigan has achieved a three-way exit without a final merits ruling: a court order for the exchange and negotiated undertakings for two brokers that routed customers to it. Ohio's letters demand the same outcome from ten firms by 16 October and offer nothing in return. Michigan's approach costs the state nothing and lets companies step back without conceding the law. Its weakness is that it binds only those that sign, and the Polymarket appeal is still pending.

Coinbase has now stepped back in Michigan while winning partial relief in Illinois. That split will last until the Supreme Court decides which court is right.