Prediction Markets Retreat Continues Across Michigan, Connecticut and Missouri

Coinbase agreed on Wednesday to stop offering new sports event contracts in Michigan by Oct. 10 and to close all remaining positions by the same date, under terms described in a Michigan Gaming Control Board press release. Michigan has now secured agreements or court orders halting sports-event contracts from Coinbase, Robinhood and Kalshi. The move follows mounting state-level enforcement aimed at prediction markets that offer sports exposures without state gambling licences.

Prediction markets retreat: what happened in Michigan

The Michigan Gaming Control Board (MGCB) said Coinbase will cease new sports contract offers and wind down existing positions by Oct. 10. The MGCB framed the agreement as part of its effort to enforce Michigan law against operators offering unlicensed sports contracts. MGCB Executive Director Henry Williams said the withdrawals demonstrate the state’s enforcement posture.

"Coinbase joining Robinhood and Kalshi in stepping back from these unlicensed sports contracts underscores Michigan’s commitment to enforcing its gaming laws," said Henry Williams.

Coinbase sued Michigan regulators earlier in 2026, arguing its event contracts fall under the Commodity Futures Trading Commission’s federal jurisdiction. A judge denied Coinbase’s request for a preliminary injunction in August, and the company is appealing to the Sixth Circuit. Under the new agreement with Michigan, Coinbase preserves its federal-jurisdiction legal argument while accepting the operational restrictions; Michigan agreed not to take enforcement action so long as Coinbase complies with the deadlines.

How this fits the broader prediction market retreat

Michigan is not an isolated case. The state has already stopped Kalshi and Robinhood from offering their sports-event contracts within Michigan through court orders or negotiated agreements. Regulators in other states have pursued similar enforcement strategies, using cease-and-desist letters, litigation and publicity to press prediction-market operators to withdraw.

Operators face a mix of outcomes: legal challenges that proceed through federal courts, negotiated exits that preserve litigation rights, and unilateral enforcement letters that compel immediate suspension. For platform vendors and operators watching market access, the distinctions matter: negotiated withdrawals can include non-enforcement assurances tied to compliance timelines, while court-ordered rulings remove that certainty.

Connecticut: three firms exit after cease-and-desist orders

The Connecticut Department of Consumer Protection said three of the nine prediction-market companies it targeted with cease-and-desist orders last month have stopped operating in the state. Webull, Gemini and ProphetX have exited Connecticut. Polymarket, Coinbase, Crypto.com, Robinhood, Novig and Underdog remain active there.

DCP Commissioner Bryan Cafferelli described the departures as the intended result of the department’s enforcement action.

"Our actions sent a clear message," said Bryan Cafferelli. "We will not tolerate illegal prediction market activity that preys upon the most vulnerable consumers."

Connecticut has also sued Kalshi after the company challenged the state’s authority to regulate its sports event contracts. Kalshi contends its contracts are federally regulated swaps; Connecticut treats those same instruments as sports wagering subject to state gambling laws. That legal dispute remains active and is one of the clearest illustrations of the federal-versus-state jurisdictional argument at the center of these enforcement campaigns.

Missouri: PrizePicks pauses new sports markets

PrizePicks notified Missouri customers this week that it had suspended new sports prediction markets in the state because of "updated legal requirements for prediction markets in Missouri." Existing entries will remain active and are eligible to pay out, but no new bets can be submitted.

Missouri Attorney General Catherine Hanaway issued cease-and-desist letters recently to six companies: Kalshi, Polymarket, Robinhood, Underdog, Novig and Crypto.com. PrizePicks was not among the recipients of those letters, but the company’s pause aligns with the state’s broader enforcement push.

Practical implications for operators, suppliers and compliance teams

Licenced operators and third-party platform providers should expect more targeted enforcement campaigns from state regulators, and they should plan for three likely scenarios:

1. Negotiated withdrawals that include operational deadlines and non-enforcement promises conditioned on compliance.

2. Court orders that bar market access in a jurisdiction pending litigation outcomes.

3. Cease-and-desist letters that compel immediate suspension and can be followed by civil or administrative enforcement.

Technical teams will need to implement geofencing and market-blocking controls to restrict new contract creation in affected jurisdictions and to close or settle positions by the regulator-imposed deadlines. Legal teams will decide whether to preserve federal pre-emption arguments in parallel litigation or to negotiate exits that avoid immediate penalties.

Regulatory teams should monitor the Sixth Circuit appeal already filed by Coinbase, as federal appellate outcomes could influence how large swathes of prediction-market activity are treated against state gambling laws. For now, states are enforcing local gaming statutes aggressively, and several major platforms have reduced or halted offerings in multiple states.

What market participants should watch next

Follow three near-term items: compliance deadlines set by state agencies, the status of Coinbase’s appeal to the Sixth Circuit, and active lawsuits between states and operators such as Kalshi. These developments will affect whether prediction markets can continue offering sports-exposure products in U.S. states without state gambling licences.

For regulatory coverage and operator implications see the regulation and b2b sections for ongoing updates. For the latest situational summaries of withdrawals and notices, check our news briefs.