A federal judge in Michigan denied Coinbase's request for a preliminary injunction. This injunction would have prevented the state from enforcing its gambling laws on the company's sports event contracts.
U.S. District Judge Shalina Kumar issued the ruling on August 6. The judge stated that Coinbase had not successfully argued that federal law preempts Michigan's authority over these prediction market products.
The decision represents a setback for Coinbase's efforts. The company seeks to offer event contracts, provided by Kalshi, under a unified federal framework. This framework would replace a patchwork of state regulations.
Coinbase (COIN) stock fell nearly 3% in response to the news. It closed at $145.41 on Thursday. This price approaches its 52-week low. The ruling allows Michigan's potential enforcement to proceed. The underlying case continues.