Robinhood Pulls Sports Prediction Contracts from Michigan

By jili tutorial · September 10, 2026

The Essentials: Robinhood and Michigan’s Prediction-Market Crackdown

Prediction-market platform Robinhood is hitting pause on new sports-related contracts in Michigan, as state regulators intensify their campaign against what they view as unlicensed sportsbooks. Michigan officials have specifically targeted companies such as Kalshi and Polymarket, arguing their event-based contracts are effectively gambling under state law.

The court-approved agreement with Michigan marks a tactical win for state officials, but it leaves larger unresolved questions about who can regulate prediction markets. Robinhood is not conceding the legal principle, and the fight is likely to continue in federal courts for months.

The Court Order at a Glance

Under the agreement, Robinhood can no longer offer new sports-event contracts to Michigan residents. Existing positions will be closed on October 9 unless the customer chooses to settle them earlier. The company can honor current positions until that deadline, but the freeze on new contracts is indefinite.

US District Judge Paul L. Maloney issued the order last week. In exchange for Robinhood’s compliance, Michigan officials agreed not to take enforcement action against the platform for its previous operations in the state.

Robinhood’s Position: Federal Law Trumps State Law

Robinhood insists that Michigan’s gambling laws do not apply to its products. The company argues its prediction contracts fall under the Commodity Exchange Act, and that the Commodity Futures Trading Commission (CFTC) has sole authority to oversee financial derivatives—including prediction contracts.

That legal theory is central to the case. If accepted, it would prevent state regulators from restricting these products even when they resemble sports betting. Michigan, by contrast, says the contracts offered to state residents are gambling, period.

Michigan’s Broader Crackdown on Prediction Markets

The Robinhood pause is only one front in a wider battle.

Michigan Attorney General Dana Nessel has sought to block prediction-market operators from reaching state residents. She recently secured a preliminary injunction against Kalshi that forces the company to geofence its services and stop Michigan users from accessing sports-related contracts. If Kalshi violates the order, it could face daily fines of up to $500,000.

Robinhood filed its own lawsuit in March against Nessel, the Michigan Gaming Control Board, and other state officials after they challenged its sports prediction products. A federal court rejected Robinhood’s request for a preliminary injunction in June. The company then appealed to the US Court of Appeals for the Sixth Circuit, and that appeal has been consolidated with a similar case involving Polymarket.

Why All This Matters for the Prediction-Market Sector

The Michigan dispute is about more than one state or one company. At stake is whether prediction markets should be treated as regulated financial products or as gambling.

If Michigan wins, state regulators could gain significant influence over national platforms. If Robinhood and its peers prevail, prediction contracts might be protected under federal commodities law, making it harder for individual states to impose bans.

What Happens Next

The pause on Robinhood’s Michigan contracts will stay in place until either the courts reach a final decision or Michigan decides to drop its ban. Given the current trajectory, sports prediction products are likely to remain blocked in the state for the foreseeable future.

The dispute could even reach the US Supreme Court. If federal and state authority over prediction markets remains unsettled, the legal system may have to decide the issue nationally.

What Michigan Users Should Know

If you hold Robinhood sports prediction contracts in Michigan, you don’t need to force a sale immediately, but you should be aware of the October 9 deadline. You can choose to close your position before that date, or wait for the automatic settlement. No new sports-event contracts are being opened while the freeze is in effect.

This remains a dynamic legal situation. Both sides are waiting on the Sixth Circuit, and the outcome could redefine the boundaries between sports betting and financial prediction markets across the US.