Detroit’s legal team plans to file an amicus brief in Coinbase’s lawsuit against Michigan, arguing that federal regulators — not state gaming authorities — should oversee prediction markets.
A federal judge in the US District Court for the Eastern District of Michigan, Judge Shalina Kumar, approved an order allowing Detroit to submit a brief in support of state officials’ motion for a preliminary injunction. The city was given until April 3 to file as the case moves forward.
Coinbase sued Michigan and gaming regulators in Connecticut and Illinois in December, shortly before announcing its prediction market product. The exchange says these event-based contracts fall under the jurisdiction of the US Commodity Futures Trading Commission (CFTC) rather than state gambling laws, and it challenges state enforcement actions on that basis.
Other platforms offering event-contract betting, such as Kalshi and Polymarket, face similar legal pushback across multiple states. CFTC Chair Michael Selig has voiced support for bringing prediction markets under federal regulation and has proposed new rules for the agency, but how the conflict between state regulators and the CFTC will be resolved remains uncertain.
Stephen Piepgrass, a partner at Troutman Pepper Locke, said courts are more likely to view prediction markets as a CFTC matter if the commission adopts a comprehensive regulatory framework, noting such clarification could counter arguments that these platforms are trying to skirt state sports-gambling bans. He also suggested the dispute could ultimately reach the US Supreme Court, pointing to the court’s 2018 Murphy v. NCAA decision, which returned sports-betting regulatory authority to the states.
State responses and court results have been mixed. A judge recently ordered Kalshi to pause operations in Nevada, the company faces criminal gambling-related charges in Arizona tied to sports and election markets, and a Tennessee judge blocked state enforcement action against Kalshi earlier this year.
Separately, the Michigan Gaming Control Board reported Detroit casinos generated more than $200 million in combined revenue for January and February, contributing over $24 million in taxes to the state.
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