Coinbase Settles with the MGCB – Stops Sports Event Contracts

Coinbase Financial Markets Inc. has complied with a request from the Michigan Gaming Control Board (MGCB) to stop offering its sports event contracts in the Great Lakes State. The company has until midnight on Saturday to fulfil its obligations, as confirmed by the watchdog on Wednesday, October 7. Coinbase has also agreed to close out any remaining open customer positions by the same deadline. The announcement marks a win for Michigan, which has targeted the prediction market sector on the basis that it leans into sports in order to dodge sports betting regulation. Coinbase has agreed to the terms of the order, following similar outcomes with Robinhood and Kalshi. In a statement, MGCB executive director Henry Williams had this to say: “Coinbase joining Robinhood and Kalshi in stepping back from these unlicensed sports contracts underscores Michigan’s commitment to enforcing its gaming laws. Operators are halting these activities because they face significant legal consequences for continuing to offer them in our state.” MGCB executive director Henry Williams In exchange, Michigan will not pursue any enforcement action against Coinbase as long as it continues to comply with the agreement, and while related appeals proceed before the US Court of Appeals for the Sixth Circuit. The deal comes after a federal court denied Coinbase’s request for a preliminary injunction, which sought to prevent the regulator from enforcing gaming rules against the company, in August. Coinbase’s appeal of that ruling is pending before the Sixth Circuit, but has been stayed until related appeals involving Robinhood, Polymarket and Kalshi are resolved. The MGCB stressed that the agreement does not resolve the underlying legal dispute over whether prediction markets can be regulated under the CFTC’s mandate, or whether sports event contracts are the remit of gambling regulators in individual states. It said the deal preserves all parties’ rights, obligations, and defenses pending a final ruling from the Sixth Circuit or the US Supreme Court.