Michigan judge denies Coinbase bid to block state enforcement of sports event contracts
U.S. District Judge Shalina Kumar denied Coinbase's bid Thursday for an injunction blocking Michigan from enforcing gambling laws against its sports event contracts. Kumar called Coinbase's arguments 'applesauce' in her ruling. The decision leaves Coinbase without protection from state enforcement as its underlying legal challenge continues. The company had sued Michigan's attorney general seeking federal preemption.
Coinbase now faces the same preemption collapse that has hit Kalshi across multiple states. Federal CFTC registration no longer blocks state gambling enforcement; judges in Michigan, Wisconsin, New York, and Utah have all said so. Coinbase must choose between geofencing Michigan users or absorbing contract-voiding risk if the state acts.
Every additional state loss multiplies legal spend and operational complexity for platforms betting on a federal shield. The Second Circuit appeal remains the only path to a national standard, but timing is uncertain. Rivals like Kalshi and Polymarket face identical exposure, so the platform that builds state compliance fastest may keep its market position.
Joins Wisconsin, New York, and Utah in rejecting federal preemption defenses by CFTC-registered prediction-market platforms, leaving Kalshi and Coinbase exposed to parallel state enforcement without a national shield.