Michigan’s attorney general is asking a state judge to hold prediction market operator Kalshi in civil contempt, saying the company kept advertising sports contracts after a court ban on both trading and marketing took effect on September 1. At the same time, the Michigan Gaming Control Board announced that Coinbase Financial Markets reached a separate agreement to stop offering sports event contracts to state customers by October 10. The two moves show Michigan regulators treating these products as unlicensed sports wagering and seeking more than just an initial court order.
Contempt request cites email pitches and a Rams ad
Dana Nessel’s office filed the contempt motion on September 29 in Ingham County Circuit Court, where Judge Rosemarie Aquilina has scheduled a November 24 session for Kalshi to argue against being held in civil contempt. The motion argues that sports betting promotions kept reaching people in Michigan despite the September 1 preliminary injunction. The injunction allows a daily fine of up to $500,000 for violations, but the contempt filing does not determine that the company breached the order or impose those penalties.
According to DeFi Rate, the state’s evidence includes a Gaming Control Board staffer who kept receiving promotional emails through her Michigan-based Kalshi account after the ban, along with another account holder who got targeted emails about upcoming NFL games. A Michigan resident with no prediction-market account said they had not downloaded such an app, yet reported seeing repeated Kalshi advertisements after July 1. The filing also points to a September 20 YouTube ad that promoted trading on a Los Angeles Rams game with the line “Kalshi: Trade Football and More.”
September 1 order reaches marketing and location workarounds
The preliminary injunction prohibits Kalshi from promoting or advertising the sports contracts covered by the order to people in Michigan, including anyone with a Michigan address. The marketing ban extends to websites, mobile applications, email, push notifications, social media, influencer partnerships, affiliate promotions, and paid placements. The company must also contract with a geolocation provider licensed by the Michigan Gaming Control Board, and it cannot rely on workarounds like accounts set up in other states or products that resemble single-game wagers, parlays, in-game bets, or player props. The September injunction replaced an earlier temporary restraining order and raised the possible daily penalty from $120,000 to $500,000.
Coinbase agreement sets October 10 cutoff
The Michigan Gaming Control Board said on October 7 that Coinbase Financial Markets had reached a stipulation with the state. Under the agreement, Coinbase will stop making new sports-related event contracts available to Michigan customers at 12:00 a.m. Eastern time on October 10, 2026, and will close out any customer positions that remain at that deadline. The requirement applies to contracts traded on KalshiEX as well as other designated contract markets, according to the board’s announcement. Michigan agreed not to take enforcement action while Coinbase remains in compliance, and the arrangement stays in place while related appeals move through the U.S. Court of Appeals for the Sixth Circuit.
Board Executive Director Henry Williams said in the announcement, “Operators are halting these activities because they face significant legal consequences for continuing to offer them in our state.” Attorney General Nessel called the agreement another step in protecting residents and said the state will, “whether by agreement or court order,” bring all sports betting into compliance with Michigan law. Coinbase had previously sought a preliminary injunction against Michigan regulators in August, but that request was denied. The stipulation does not settle the core legal question of whether Michigan can regulate CFTC-registered event contracts as gambling, and the board said it preserves each side’s rights and defenses pending a final court ruling.
Robinhood and Kalshi actions show wider state campaign
Michigan has now obtained court orders or agreements covering Kalshi, Robinhood, and Coinbase, according to the board. Robinhood Derivatives agreed on September 9, 2026, to stop offering new sports event contracts to Michigan customers by the end of that day and to close positions by October 9. Nessel secured the preliminary injunction against Kalshi on September 2, after filing a lawsuit in March 2026 under Michigan’s Lawful Sports Betting Act. The state alleged that Kalshi let residents wager on sports through event contracts without licensing approval. The case was removed to federal court, then sent back to Ingham County Circuit Court; a June temporary restraining order had already halted Kalshi’s sports betting operations and advertising in the state.
Nevada fight highlights compliance gaps
Michigan is not the only state pursuing Kalshi over compliance while the federal issue remains unresolved. In Nevada, regulators sought contempt proceedings in June after investigators said they could still buy prohibited contracts. Kalshi later said it would adopt GeoComply location checks by August 12, but Nevada’s Gaming Control Board reported in an August 14 filing that nine trades went through the Kalshi mobile app by investigators located in Nevada the day after the deadline; the board asked for $120,000 in daily penalties plus legal fees. Kalshi disputed those claims, saying investigators misstated their residence and used an older app build. The Nevada board said those arguments were without merit and that Kalshi missed its compliance deadline. Michigan’s contempt request focuses on continued marketing through email and advertising rather than completed trades.
Federal preemption question still open
The stipulation with Coinbase does not answer whether Michigan may treat commodity event contracts registered with the Commodity Futures Trading Commission as gambling. The board said the deal preserves all parties’ rights, obligations, and defenses until the Sixth Circuit or the U.S. Supreme Court issues a final ruling. Sixth Circuit proceedings have been paused while related appeals involving Robinhood, Polymarket, and Kalshi are resolved, according to the board. Kalshi’s main legal argument, as summarized by DeFi Rate, is that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over these products.
