Robinhood will remove its sports event contracts from Michigan effectively immediately, the Michigan Gaming Control Board announced Wednesday.
Just how long Robinhood remains on the sidelines, however, remains an open question as legal battles over prediction markets swirl throughout the country, including in Michigan. Under a negotiated agreement with the state, Robinhood will pull sports markets and also close open positions within 30 days.
The court-approved deal does not “concede any party’s legal position” on whether sports event contracts fall under the regulation regime of the Commodity Futures Trading Commission (CFTC), as prediction markets operators contend, or that of state gaming regulators.
“This agreement is another win for Michigan consumers,” said MGCB Executive Director Henry Williams. “Sports wagering products should only be offered by operators who are licensed, regulated, and held accountable under Michigan law.
“We’re pleased Robinhood has agreed to step back from offering these unregulated products while the courts continue to sort out the broader legal questions, and we’ll keep working with the Attorney General’s office to make sure Michigan consumers are protected.”
Could other states follow Michigan’s lead?
The US prediction markets landscape evolves seemingly by the hour, which makes Michigan’s arrangement with Robinhood more intriguing as a stopgap.
Robinhood, Kalshi and fellow prediction markets operators are battling gambling regulators throughout the country, but received unfavorable news late last month when the Ninth Circuit Court of Appeals appeared to clear a path to state-level enforcement in ruling against the companies.
While Kalshi’s long-shot request this week for an en banc rehearing at the Ninth Circuit could slow state pursuit, Robinhood’s temporary deal in Michigan could present a blueprint for operators hoping the Supreme Court agrees to grant either New Jersey’s cert petition or another forthcoming one.
Robinhood joins Kalshi on Michigan ice
Robinhood is the second prediction markets company to step back from offering sports in Michigan, although it is the first to do so willingly. A judge last week granted Michigan’s request to force Kalshi to stop offering sports and geofence the state through a commercial geolocation provider.
In both the Robinhood arrangement and Kalshi order, Michigan Attorney General Dana Nessel said the state is trying to protect its regulated market.
“Throughout this litigation, our priority has been protecting Michigan consumers from exploitative practices and ensuring betting in our state remains fair and regulated,” Nessel said in a statement. “I am proud of the dedicated attorneys in my office for securing an agreement that protects Michiganders while our case moves forward.”
