Coinbase Loses Bid for Preliminary Relief in Michigan Sports Betting Case

Coinbase Financial Markets has suffered a setback in its bid to challenge Michigan's sports betting laws. On August 6, US District Judge Shalina Kumar denied Coinbase's request for preliminary relief, allowing state officials to enforce existing laws against the company's event contracts.

Kumar concluded that Coinbase had not shown a likelihood of success on its federal preemption claims, which would have exempted their sports event contracts from Michigan's gambling authority under the Commodity Exchange Act and CFTC regulation. The judge rejected Coinbase's assertion that compliance with federal derivatives law and Michigan's Lawful Sports Betting Act would be impossible.

The ruling leaves Michigan's sports betting authority intact while Coinbase continues to challenge state jurisdiction nationwide. Federal courts remain divided over whether CFTC-regulated sports contracts preempt state gambling and betting laws, with some courts siding with Kalshi in New Jersey and others disagreeing.