Coinbase Reaches Stipulation with Michigan Gaming Control Board Over Event Contracts
Written by Ellis Werner · Oct 8, 2026
Coinbase Reaches Stipulation with Michigan Gaming Control Board Over Event Contracts
Coinbase Financial Markets, Inc. has entered into a formal stipulation with the Michigan Gaming Control Board that requires the company to stop offering new sports-related event contracts to customers in the state while closing out any remaining open positions by 12:00 a.m. Eastern time on October 10, 2026. This agreement applies to contracts traded on KalshiEX and other designated contract markets, and it forms the latest step in Michigan's broader enforcement actions against operators that the state classifies as providing unlicensed sports wagering products under the guise of prediction markets.
The stipulation prevents Michigan from pursuing enforcement against Coinbase as long as the company maintains compliance and while related appeals continue in the U.S. Court of Appeals for the Sixth Circuit. Observers note that the arrangement leaves the underlying legal questions about regulatory authority over these contracts unresolved, allowing both sides to address immediate operational concerns without settling the larger dispute.
Details of the Agreement
Under the terms outlined in the stipulation, Coinbase must halt all new offerings of sports-related event contracts to Michigan residents immediately. Existing customer positions must reach full closure by the October 2026 deadline, which gives traders a defined window to manage their holdings before trading ends in the state. The Michigan Gaming Control Board has confirmed that this measure covers platforms including KalshiEX, ensuring consistent application across multiple designated contract markets operating in the jurisdiction.
State regulators have tied the agreement to ongoing reviews of products that blend elements of event contracts with traditional sports outcomes. Data from the Michigan Gaming Control Board shows these actions target offerings the agency views as falling outside permitted frameworks for prediction markets. The stipulation provides temporary relief from enforcement proceedings, yet it explicitly avoids any final determination on whether such contracts require state licensing as sports wagering activities.
Timeline and Compliance Requirements
October 10, 2026 marks the firm cutoff for all open positions, creating a clear endpoint that aligns with the appeals process moving through federal courts. Coinbase has agreed to monitor customer accounts and facilitate orderly wind-downs, which prevents abrupt disruptions for those holding active contracts. The Michigan Gaming Control Board retains authority to verify compliance through reporting and audits during this period, while the appeals in the Sixth Circuit continue to examine questions of federal preemption and state regulatory reach.
Background on Michigan's Regulatory Actions
Michigan has pursued similar restrictions against other operators offering event contracts tied to sports results, establishing a pattern of enforcement that classifies these products as unlicensed sports wagering. The current stipulation with Coinbase follows that approach and extends oversight to contracts available through designated markets like KalshiEX. Court filings referenced in the agreement highlight disputes over whether these instruments fall under Commodity Futures Trading Commission jurisdiction or require separate state approval as gaming activities.
Those involved in the proceedings have observed that the stipulation allows trading platforms to maintain operations elsewhere while addressing Michigan-specific concerns. The arrangement does not extend to other states or resolve parallel cases, which leaves the Sixth Circuit appeal as the primary avenue for clarifying broader regulatory boundaries. State records indicate that enforcement priorities remain focused on protecting consumers from products the Michigan Gaming Control Board determines operate without required licenses.
Scope of the Stipulation
The agreement covers only sports-related event contracts and leaves non-sports prediction markets unaffected for Michigan customers. Coinbase retains the ability to offer other categories of event contracts that do not involve athletic competitions or outcomes, which distinguishes the restricted activities from the company's wider platform offerings. The Michigan Gaming Control Board has stated that this targeted scope reflects the agency's focus on sports wagering equivalents rather than all event-based trading.
Appeals pending in the Sixth Circuit will continue independently of the stipulation, and the deal contains no provisions that bind either party to a particular outcome in those proceedings. Legal representatives for both sides have confirmed that the temporary halt in new offerings and the October 2026 closure deadline serve as interim measures while judicial review proceeds. This structure preserves the status quo for enforcement without conceding positions on the underlying legal questions.
Implications for Market Participants
Customers holding open positions in Michigan now face a structured timeline to close contracts before the 2026 deadline, and Coinbase must provide notifications and support to facilitate those transactions. The Michigan Gaming Control Board has indicated that it will monitor platform communications to ensure residents receive accurate information about the wind-down process. Traders outside Michigan experience no direct changes from this stipulation, although similar regulatory developments in other jurisdictions could produce comparable agreements in the future.
Designated contract markets such as KalshiEX must align their Michigan-facing operations with the stipulation terms, which requires updates to eligibility checks and position management systems. The Michigan Gaming Control Board retains oversight authority during the compliance period, including the right to request data on customer activity and contract closures. These measures aim to maintain orderly markets while the federal appeals address questions of regulatory jurisdiction.
Conclusion
The stipulation between Coinbase Financial Markets and the Michigan Gaming Control Board establishes clear operational limits on sports-related event contracts through October 2026 while appeals advance in federal court. This agreement addresses immediate compliance needs without resolving the wider debate over how prediction markets intersect with state sports wagering laws. Participants and platforms now operate under defined parameters that prioritize orderly position closures and continued judicial review.