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Robinhood is getting out of the sports event contract business in Michigan, at least for now.
The exit isn’t voluntary.
The Michigan Gaming Control Board (MGCB) announced Wednesday that Robinhood Derivatives LLC agreed to stop offering new sports-related event contracts to Michigan customers by the end of that same day, and to close out any customer positions still open by Oct. 9, under a court-approved stipulation and order.
Event contracts let a customer take a position on how a game turns out, priced and settled like a futures contract instead of a straight bet. Robinhood and Kalshi have both argued that federal commodities law lets them run those products anywhere in the country. Michigan disagrees, and it now has two settlements backing that argument up.
That makes Robinhood the second prediction market platform to fold in Michigan this year.
It follows two rulings against Kalshi, which was forced in June to stop offering sports contracts in Michigan. In September, Circuit Judge Rosemarie E. Aquilina granted another preliminary injunction. raising the penalty for noncompliance to $500,000 a day.
What the agreement actually settles
Not much, legally speaking. The stipulation preserves both sides’ positions instead of resolving them.
Robinhood’s central argument survives fully intact: its contracts are federally regulated financial products, not state-regulated gambling, and therefore outside Michigan’s reach entirely.
That fight isn’t over, and it didn’t start with this week’s settlement. Robinhood and Polymarket already sued Michigan directly this year, asking a federal court to block the state from regulating their contracts at all. U.S. District Judge Paul Maloney denied that request in June, ruling the companies were unlikely to show their contracts qualify as federally exempt swaps, and the case went up to the Sixth Circuit on appeal that same day.
That circuit has plenty else to sort through. A Tennessee judge sided with prediction markets in February. An Ohio judge sided with state regulators in March. Robinhood’s own appeal already has a docket number, Robinhood Derivatives, LLC v. Dana Nessel, No. 26-1542, and it’s being briefed now. Kalshi has a separate appeal moving through the same circuit, Dana Nessel v. KalshiEX, No. 26-1639, out of a different judge’s courtroom and not yet ready for briefing.
The Michigan settlement holds only as long as all of that stays unresolved.
Two other courts are moving on the same question at the same time. The Ninth Circuit ruled against Kalshi in a Nevada case Aug. 28, rejecting the same swaps argument Robinhood is making, and Kalshi has since asked that court for an en banc rehearing rather than go straight up. Robinhood didn’t wait. It filed its own Supreme Court petition targeting that same Ninth Circuit ruling, asking for expedited treatment and consolidation with a petition New Jersey already filed after the Third Circuit sided with Kalshi in a separate case months earlier.
Gaming attorney Daniel Wallach called the pairing “a likely tag-team strategy.” Kalshi’s rehearing request buys time and discourages new enforcement out of the Ninth Circuit, in his read, while Robinhood pushes to get the underlying question in front of the Supreme Court faster.
What changes for Michigan customers
Robinhood account-holders in Michigan lose access to new sports contracts immediately. Anyone still holding a position has until Oct. 9 to let it run or close it out. Nothing else about Robinhood’s Michigan business, its stock and options trading, is affected.
The state’s message hasn’t changed
MGCB Executive Director Henry Williams framed the settlement as part of the same pattern that produced the Kalshi injunction two months earlier.
“This agreement is another win for Michigan consumers. Sports wagering products should only be offered by operators who are licensed, regulated, and held accountable under Michigan law.”
Nessel struck the same note.
“Throughout this litigation, our priority has been protecting Michigan consumers from exploitative practices and ensuring betting in our state remains fair and regulated.
“I am proud of the dedicated attorneys in my office for securing an agreement that protects Michiganders while our case moves forward.”
