Prediction Markets Retreat From Michigan, Connecticut, Missouri Amid Legal Pressure

As legal battles and pressure from state regulators mount, some prediction market platforms in three states are pulling back sports event contracts. 

For starters, Coinbase has agreed to stop offering new sports event contracts. That went into effect on October 10. The Michigan Gaming Control Board has now gotten agreements from or court orders stopping Coinbase, Robinhood, and Kalshi from offering sports event contracts. 

“Coinbase joining Robinhood and Kalshi in stepping back from these unlicensed sports contracts underscores Michigan’s commitment to enforcing its gaming laws,” MGCB Executive Director Henry Williams said in a press release following Coinbase's decision. “Operators are halting these activities because they face significant legal consequences for continuing to offer them in our state.”

Coinbase Joins Robinhood, Kalshi in Halting Michigan Sports Contracts

This follows Robinhood's agreement to stop and Kalshi's court order to stop. 

For Coinbase, this decision follows its lawsuit against Michigan regulators earlier this year, claiming that sports event contracts fall under the federal jurisdiction of the Commodity Futures Trading Commission. 

A judge denied Coinbase's request for a preliminary injunction back in August, and an appeal is pending in the Sixth Circuit. 

With this agreement, Coinbase can continue its legal argument, and Michigan won't take action against Coinbase as long as it complies. 

Connecticut, Missouri See Prediction Market Restrictions

Additionally, in Connecticut, the Connecticut Department of Consumer Protection said three of nine prediction market platforms hit with a cease-and-desist have left the state. These include Gemini, ProphetX, and Webull. Meanwhile, Polymarket, Coinbase, Crypto.com, Robinhood, Novig, and Underdog remain. 

“Our actions sent a clear message,” DCP Commissioner Bryan Cafferelli said on Monday. “We will not tolerate illegal prediction market activity that preys upon the most vulnerable consumers. Three prediction market operators heard that message and are leaving our state accordingly. We are hopeful the rest will decide targeting Connecticut consumers isn’t worth breaking the law.”

Connecticut has also sued Kalshi.

Then, over in Missouri, PrizePicks has stopped its prediction markets, telling players it was because of “updated legal requirements for prediction markets in Missouri.”

All existing trades can remain, but no new ones can proceed. 

Additionally, in Missouri, Attorney General Catherine Hanaway issued cease-and-desist notices to six companies, but PrizePicks wasn't included. Instead, Crypto.com, Kalshi, Novig, Polymarket, Robinhood, and Underdog did.