Michigan Judge Shuts Down Coinbase Event Contracts
David Genge Published 10/08/2026
A Michigan judge has denied a legal bid by Coinbase to block potential state enforcement over its planned offering of sports-event contracts. Coinbase was seeking a preliminary injunction to thwart any attempt by Michigan lawmakers to block the company's plan to offer sports-event contracts in the state. Coinbase was planning to use its platform to provide customers, including those in Michigan, access to event contracts offered by Kalshi.
Another Michigan judge had previously ruled that Kalshi's sports-event contracts were sports betting. Granting Michigan's government a temporary injunction, ordering the prediction market site to geofence its sports-event contracts in the state.
A Michigan judge squashed Coinbase's argument as being nothing more than applesauce
Lawyers representing Coinbase were arguing that Michigan's state gambling laws could not override the federal regulations from the Commodity Futures Trading Commission (CFTC) that govern prediction market sites. They are ruled under the federal Commodity Exchange Act (CEA). Coinbase put forth the argument that it would be impossible to follow the rules of the CEA and also comply with Michigan's Lawful Sports Betting Act (LSBA).
However, U.S. District Judge Shalina Kumar of the Eastern District of Michigan wouldn't validate their argument. Judge Kumar rejected the notion brought forth by Coinbase that sports event contracts qualify as swaps under the CEA.
"Coinbase's averments are, in a word, applesauce," Judge Kumar wrote, according to reporting by The Block. "[It] is not impossible for Coinbase to comply with the LSBA simply because it is costly and challenging.
"Coinbase has not carried its burden to establish the factors required for a preliminary injunction against the Defendants."
Coinbase went on the offensive, without success
The Michigan case was part of a widespread offensive by Coinbase. The company was seeking to create a smooth runway before launching its sports-event contract platform.
In December 2025, Coinbase filed lawsuits in Michigan, Illinois, and Connecticut, making the same argument as the Michigan case in each state.
"State efforts to control or outright block these markets stifle innovation and violate the law," Coinbase Chief Legal Officer Paul Grewal told Cognition. "Prediction markets are fundamentally different from sportsbooks. Casinos win only if you lose and set odds to maximize their profits. Prediction markets are neutral exchanges, indifferent to price, that match buyers and sellers."
The CFTC has made similar legal arguments in support of the prediction market sites it regulates. The federal agency has filed legal action to back these sites in Arizona, Connecticut, Illinois, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin.
Kalshi has already been ordered to shut down in Michigan
Last month, Ingham County Circuit Court Judge Rosemarie Aquilina issued a temporary restraining order against Kalshi in Michigan. It bars Kalshi from offering sports-event contracts to Michigan residents. In her finding, the judge agreed with the state's assertion that the Kalshi platform was violating state gambling laws.
The judge gave the prediction market company until August 12 to geofence its product across Michigan. Absent another extension from the court, Kalshi will be facing daily fines of $500,000 beginning August 13. These fines would be for failure to geofence its product in Michigan. Judge Aquilina set no expiration date for the temporary restraining order.
The CFTC ordered Kalshi to defy the court order.
"The Commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations,” CFTC Chair Michael Selig said in a statement.