Robinhood will stop offering new sports-related event contracts to Michigan customers by the end of Wednesday under a court-approved agreement with state officials, extending the practical reach of Michigan’s prediction market crackdown beyond Kalshi.
The agreement does not settle whether Michigan can legally regulate Commodity Futures Trading Commission-registered prediction markets as gambling.
Instead, Robinhood agreed to pause new Michigan sports-contract offerings and unwind remaining positions while several closely related Sixth Circuit appeals, including cases involving Robinhood, Polymarket, Coinbase and Kalshi, work through the courts.
Details on Robinhood agreement
U.S. District Judge Paul L. Maloney last week ordered Robinhood to stop offering new sports-related event contracts to Michigan customers that trade on any designated contract market by the end of day Wednesday.
The agreement specifically covers contracts offered through exchanges operated by KalshiEX and Rothera Exchange and Clearing.
Robinhood must also close any outstanding sports-event positions held by Michigan customers by the end of day Oct. 9, unless customers voluntarily close them earlier.
In exchange, Michigan officials agreed to forbear from bringing enforcement actions against Robinhood over sports-related event contracts as long as the company complies with the stipulation.
Not a merits ruling
The agreement is a pause, not a legal victory for either side. It explicitly preserves all parties’ rights, obligations and defenses, including Robinhood’s claim that the Commodity Exchange Act preempts Michigan’s gambling laws when applied to event contracts traded on CFTC-regulated designated contract markets.
Robinhood filed its lawsuit against Michigan Atty. Gen. Dana Nessel, the Michigan Gaming Control Board and other state officials in March. The Western District of Michigan denied its preliminary-injunction request June 17, and Robinhood appealed the next day.
The Sixth Circuit appeal is now part of a larger group of Michigan prediction market disputes. Robinhood’s appeal has been consolidated with an appeal brought by Polymarket US, while Coinbase has a separate appeal pending in the same circuit. The Sixth Circuit is also considering consolidated appeals involving Kalshi’s Ohio and Tennessee cases.
Michigan’s Kalshi order reaches further
The deal reflects the effect of Michigan’s state-court injunction against Kalshi. In Nessel v. KalshiEX, the Ingham County Circuit Court entered a preliminary injunction barring Kalshi from offering or listing sports-related event contracts in Michigan.
Michigan’s Department of Attorney General then asked Robinhood to stop Michigan customer trading in sports contracts in light of that order. Robinhood sought time to notify customers and execute an orderly transition, leading to the current agreement.
The result is that Michigan’s enforcement campaign has effectively pushed a second major consumer platform to geofence sports contracts in the state, even though the underlying preemption question remains unresolved.
When does Robinhood deal expire?
Robinhood’s pause will remain in effect until the first of two developments:
- Final resolution of the Robinhood, Polymarket, Coinbase or Kalshi Sixth Circuit appeals, including a Supreme Court decision or denial of review if a cert petition is filed.
- Dissolution of the Michigan state-court preliminary injunction against Kalshi.
That language gives the agreement a potentially long lifespan. The Sixth Circuit has heard argument in the consolidated Kalshi appeals, but prediction market litigation is now producing conflicting decisions across the country, including the Ninth Circuit’s recent ruling for Nevada and the Third Circuit’s earlier ruling for Kalshi in New Jersey.
Those conflicting appellate decisions increase the likelihood that the Supreme Court will eventually need to decide whether sports event contracts are federally regulated swaps or gambling products states can license and restrict.
