CFTC relief on event contract software leaves Michigan sports restrictions intact
A CFTC relief action that explicitly covers software providing access to event contracts could enable more third-party apps to offer prediction markets in states that allow them. The federal action does not alter Michigan's existing sports restrictions, which remain in force. New Jersey stands to see expanded app-based access under the relief, while Michigan traders and platforms see no change in the current rules. The relief addresses software infrastructure rather than underlying state gambling prohibitions on sports contracts.
The relief draws a sharp line between federal infrastructure permission and state gambling law. Platforms like Robinhood and Kalshi now know that CFTC clearance for software does not pre-empt Michigan's sports restrictions, forcing a state-by-state compliance strategy rather than a single federal playbook. Robinhood's Michigan retreat under its state gaming board deal shows what happens when platforms ignore that line.
Traders in permitted states may gain more app choices, but those in restricted states see no benefit. The patchwork deepens: each state maintains its own wall, and platforms must build separate product maps for each jurisdiction. Legal teams now budget for dual-track fights, federal and state, with no single ruling expected to clear the board.
Kalshi and Polymarket remain the platforms still facing state sports restrictions in Michigan, with the CFTC software relief doing nothing to loosen the compliance bind.