Detroit Becomes First U.S. City to Oppose Prediction Markets in Court

The City of Detroit has become the first U.S. municipality to enter the legal battle over prediction markets. On March 26, 2026, U.S. District Judge Shalina D. Kumar granted Detroit permission to file an amicus curiae brief in support of Michigan's opposition to Coinbase in its ongoing federal lawsuit, marking what gaming attorney Daniel Wallach called "the first time a U.S. municipality has taken a direct legal stance against prediction markets."

The Underlying Case | Coinbase vs. Michigan

The dispute originates from a lawsuit filed by Coinbase Financial Markets in December 2025 against Michigan Attorney General Dana Nessel and the Michigan Gaming Control Board. Coinbase argues that its prediction markets, operated in partnership with Kalshi, are federal "event contracts" regulated exclusively by the CFTC, which would preempt state gambling laws. Michigan counters that markets tied to sports and election outcomes constitute unlicensed gambling subject to state oversight.

Why Detroit Is Intervening

Detroit's involvement is rooted in economics. The city hosts Michigan's three commercial casinos, MGM Grand Detroit, MotorCity Casino, and Hollywood Casino at Greektown, which together generated over $200 million in revenue during January and February 2026, including more than $24 million in state wagering taxes and $11.9 million in direct municipal fees paid to Detroit in February alone. City attorneys argue that prediction markets operating without state gaming licenses or local tax obligations pose a direct threat to that revenue base.

What the Amicus Brief Adds

Amicus briefs carry no binding weight, but they give courts a wider view of who is affected by a ruling. Detroit's brief is notable because it introduces a local government voice into a dispute that had been framed as federal versus state jurisdiction. If the court sides with Coinbase, municipalities with licensed gaming operations could see their tax base undercut by unregulated online competitors, a concern that extends well beyond Michigan.

The case is being watched closely by Kalshi, Polymarket, and other prediction market operators whose ability to offer sports and election contracts in the U.S. depends largely on whether CFTC jurisdiction holds against state-level challenges.

Related: AOC Calls MLB's $300M Polymarket Deal Sad, Warns Against Pervasive Gambling | White House Issues Block and Find Out Warning on Coinbase Clarity Act