Robinhood has agreed to pull its sports-event contracts out of Michigan, at least until at least the U.S. Court of Appeals for the Sixth Circuit rules on appeals involving the company, Coinbase, and Kalshi, as well as a state court case against Kalshi.
Last week, a federal judge ordered Kalshi to stop offering its sports-event contracts by the end of Wednesday as part of an agreement with state officials.
“While we do not believe these contracts violate any state laws, beginning on (Wednesday), we will restrict customers in Michigan from entering new sports-related event contract positions,” a Robinhood spokeswoman said in a statement emailed to CDC Gaming.
Robinhood will continue to offer access to the broader prediction markets hub, according to the company. In exchange for blocking state residents from its sports-event contracts, Michigan officials agreed not to enforce state sports betting laws against Robinhood while the company complies.
The agreement expires with a final resolution to the Sixth Circuit cases, including any U.S. Supreme Court proceedings if any of the parties seeks a writ of certiorari or the dissolution of the state court preliminary injunction in the case between the attorney general and Kalshi.
Messages left with the Michigan Gaming Control Board (MGCB) and state Attorney General Dan Nessel on Tuesday were not returned.
Robinhood’s decision comes less than a week after Nessel won a preliminary injunction against Kalshi.
“Kalshi’s long attemped to pass itself off as a legitimate gaming operation in our state and I am relieved that this order further protects Michigan residents from its predatory practices,” Nessel said in a statement.
Ingham County Circuit Court Judge Rosemarie Aquilina ordered Kalshi to stop offering, listing, executing, settling, or otherwise facilitating sports-event contracts for anyone located in Michigan.
“Michigan and its most vulnerable citizens are suffering and will continue to suffer immediate and irreparable harm absent relief from being exploited by Kalshi’s sports betting operation masquerading as an investment opportunity,” Aquilina wrote in the five-page filing.
Aquilina noted that Kalshi eludes the comprehensive patron-protection mechanisms found in Michigan’s regulatory framework, and their failure to comply with state gaming law gives it a “massive and unfair advantage” over the licensees that comply with the state’s regulatory structure.
Kalshi must use a third-party geolocation provider licensed by the MGCB to keep state residents, and anyone physically located in the state, from accessing their sports-event contracts. Failure to do so could be a $500,000 fine for each day of noncompliance.
