Detroit plans to join the Coinbase-Michigan case, becoming the first U.S. city to enter the growing legal battle over prediction markets.
Photo by Laura Brain on Unsplash
The City of Detroit is poised to become the first municipality to intervene in litigation against prediction markets, planning to file an amicus curiae brief in the ongoing case between Coinbase and Michigan officials.
According to the March 26 filing, Detroit has requested permission to submit its brief by April 3. That indicates that the city sees a direct interest in how prediction markets are treated under state law.
Detroit’s involvement may be related to its position as a major gaming hub. The city is home to Michigan’s three commercial casinos. According to data from the Michigan Gaming Control Board, those casinos generated more than $100 million in monthly revenue in both January and February. The state collected more than $24 million in taxes.
The amicus brief suggests the city may view the expansion of unlicensed or federally preempted event contracts as a potential competitive threat to state-regulated gambling operators.
As those products increasingly resemble traditional betting formats, municipalities with significant gaming exposure may seek a more active role in shaping how they are treated alongside existing gambling frameworks.
At the center of Detroit’s action is Coinbase, which is seeking to block Michigan officials from enforcing gambling laws against federally regulated event contracts.
The case marked Michigan’s entry into the broader prediction market litigation. Coinbase filed its lawsuit just one day after announcing its entry into the space through a partnership with Kalshi. In its filings, Coinbase argues that Michigan’s stance would expose the company to potential civil and criminal liability for facilitating trades it considers federally regulated.
State officials, however, have maintained that contracts tied to sports fall within Michigan’s existing gambling framework.
The state has also received backing from tribal gaming groups. They argue that Coinbase’s approach could disrupt existing state-tribal gaming structures tied to regulated sports betting.
Coinbase is not alone in challenging Michigan’s enforcement stance.
At the beginning of the month, Attorney General Dana Nessel filed a civil enforcement action against Kalshi. A day later, Polymarket filed suit against Nessel and the state. Later that same day, Robinhood also filed a federal lawsuit seeking declaratory and injunctive relief.
A federal judge denied Polymarket’s request for a temporary restraining order on March 10, allowing state enforcement to continue. There have been no major developments in the other cases since.
Detroit is not alone in pursuing action against emerging gaming formats.
Earlier this month, Baltimore filed a lawsuit against six major sweepstakes casino operators. It alleges their platforms constitute illegal online gambling under Maryland law.
Baltimore claims the operators violated its Consumer Protection Ordinance by offering casino-style games despite online casino gambling being illegal in the state.
At the center of the lawsuit is the industry’s “dual-currency” model, under increasing scrutiny from lawmakers across the U.S. Multiple states have advanced legislation to ban sweepstakes casinos.
While Baltimore’s case is not related to prediction markets, Detroit’s involvement signals a potential shift toward greater municipal participation in gaming-related enforcement.
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