KEY TAKEAWAYS
- Polymarket US agreed to stop offering new sports event contracts in Michigan and close open positions by Nov. 25 under a federal court-approved stipulation.
- Michigan now has agreements or court orders halting sports contracts from Kalshi, Robinhood, Coinbase and Polymarket.
- The deals pause the fight rather than settle it, with the Sixth Circuit and a pending Supreme Court petition set to decide who regulates sports event contracts.
Polymarket this week became the fourth prediction market platform to shut off sports contracts in Michigan.
QCX LLC, which operates as Polymarket US, agreed to stop offering new sports-related event contracts to Michigan customers and to close any remaining open positions by the end of the day Eastern Time on Nov. 25, the Michigan Gaming Control Board (MGCB) announced Wednesday.
The U.S. District Court for the Western District of Michigan approved the stipulation. In exchange, the state agreed not to take enforcement action against Polymarket US as long as the company remains in compliance.
The agreement caps a two-month run in which Michigan pushed four of the biggest sports event contract platforms out of one of the country’s largest legal sports betting markets, achieving compliance successes while the jurisdictional question remains open and appears headed to the U.S. Supreme Court.
“Polymarket joining Kalshi, Robinhood, and Coinbase in stepping back from these unlicensed sports contracts shows that Michigan’s approach is working,” MGCB Executive Director Henry Williams said in the release. “If you want to offer sports wagering to Michigan residents, you need a Michigan license.”
Polymarket notified customers via email Monday. SBC Americas reached out to the company for comment but had not heard back by the time of publishing.
Polymarket lost twice in Michigan federal court before settling
Polymarket sued Michigan officials in federal court in March to block the state from enforcing its gaming laws. The court denied its request for a temporary restraining order that month, and subsequently denied its motion for a preliminary injunction in June. Polymarket’s appeal of that ruling remains pending before the Sixth Circuit Court of Appeals.
In September, the Michigan Department of Attorney General warned Polymarket that it would take legal action if the company kept offering sports contracts to Michigan residents, the release states.
“One by one, from Kalshi to Robinhood and Coinbase, and this latest agreement with Polymarket, we’re holding the national sports betting industry accountable to Michigan law,” Attorney General Dana Nessel said in Wednesday’s release.
Michigan won a state court injunction against Kalshi first
As Williams referenced, Michigan has achieved similar success against three other operators:
- Coinbase
- Kalshi
- Robinhood
Nessel sued KalshiEX in Ingham County Circuit Court in March, alleging its sports contracts violate the Lawful Sports Betting Act.
Judge Rosemarie Aquilina granted a temporary restraining order in June and converted it to a preliminary injunction on Sept. 1, calling called Kalshi “a sports betting operation masquerading as an investment opportunity.”
Her order barred Kalshi from offering or facilitating sports betting contracts to anyone in Michigan and required it to send the order to every futures commission merchant that distributes its sports contracts. Violations of the geofencing requirement carry a $500,000 daily fine.
Robinhood and Coinbase followed with near-identical deals
Robinhood Derivatives agreed to stop offering new sports contracts in Michigan by the end of Sept. 9 and to close remaining customer positions by Oct. 9. The stipulation covers contracts traded on any designated contract market, including Kalshi and Rothera Exchange and Clearing. It lasts until the Sixth Circuit appeals end, including any Supreme Court review, or until the Kalshi state court injunction dissolves.
Coinbase Financial Markets then agreed to halt new sports contracts and close open positions by Oct. 10. A federal court denied Coinbase’s preliminary injunction request in August, and its Sixth Circuit appeal sits on hold behind the Robinhood, Polymarket, and Kalshi appeals.
Each agreement preserves the companies’ legal argument that federal law shields Commodity Futures Trading Commission-registered contracts from state gambling law.
Sixth Circuit already sided with states
The Sixth Circuit ruled Sept. 25 in KalshiEX v. Schuler that Ohio and Tennessee gambling laws are not preempted, vacating an injunction that had shielded Kalshi in Tennessee. That decision followed the Ninth Circuit’s Aug. 28 ruling against Kalshi in Nevada.
The Third Circuit went the other way in April, holding 2-1 that Kalshi’s sports contracts are swaps under exclusive CFTC jurisdiction and that federal law preempts New Jersey’s gambling laws.
New Jersey asked the Supreme Court to resolve the split on Sept. 2. Thirty-nine states and the District of Columbia filed a brief backing New Jersey’s petition in Flaherty v. KalshiEX, and the NFL and more than 140 tribes urged the justices to leave regulation to the states.
Kalshi’s response in Flaherty is due Nov. 9, and it filed rehearing petitions in the Sixth and Ninth Circuits citing forthcoming CFTC rules.
CFTC moved to write its own answer
On Oct. 9, the CFTC proposed classifying qualifying sports, political, weather, and cultural event contracts as swaps, alongside an interim final rule excluding state- and tribal-authorized sportsbook and casino wagers from the swap definition.
CFTC Chairman Michael Selig maintains that the Commodity Exchange Act gives the agency sole authority over event contracts. The CFTC has sued 10 states to defend its jurisdiction, including a lawsuit against Utah this week.
