The City of Detroit is set to make history as the first city in the United States to participate in the ongoing legal dispute regarding prediction markets. The city plans to submit an amicus curiae brief in the case involving Coinbase and officials from Michigan.
Detroit has requested authorization to file its brief by April 3, as indicated in a filing dated March 26. This move suggests the city has a vested interest in the legal treatment of prediction markets under state law.
Detroit's involvement may stem from its status as a prominent gaming center, housing Michigan’s three commercial casinos. According to the Michigan Gaming Control Board, these casinos generated over $100 million in revenue each month during January and February, contributing more than $24 million in taxes to the state.
The content of the amicus brief implies that Detroit perceives the rise of unregulated or federally preempted event contracts as a potential competitive threat to state-licensed gambling operators.
As these products increasingly resemble traditional betting options, cities with significant gaming interests may seek to influence how these markets are regulated alongside established gambling frameworks.
The case at the heart of Detroit's action involves Coinbase, which is attempting to prevent Michigan officials from enforcing gambling regulations against federally regulated event contracts. This case represents Michigan's entry into a wider legal battle concerning prediction markets. Coinbase initiated its lawsuit just a day after announcing its partnership with Kalshi.
In its legal arguments, Coinbase contends that Michigan's position could expose it to civil and criminal liabilities for facilitating trades it views as federally regulated. Conversely, state officials assert that contracts associated with sports fall under Michigan’s existing gambling laws.
Tribal gaming groups have also expressed support for the state's position, arguing that Coinbase's approach could disrupt established state-tribal gaming agreements related to regulated sports betting.
Coinbase is not the only entity challenging Michigan's enforcement actions. Earlier this month, Attorney General Dana Nessel initiated a civil enforcement action against Kalshi. The following day, Polymarket filed a lawsuit against Nessel and the state, and later that same day, Robinhood sought federal declaratory and injunctive relief.
A federal judge denied Polymarket’s request for a temporary restraining order on March 10, allowing state enforcement to proceed. Since then, there have been no significant updates in the other cases.
Detroit is not the only local government taking action against new gaming formats. Earlier this month, Baltimore filed a lawsuit against six major sweepstakes casino operators, claiming their platforms violate Maryland law by constituting illegal online gambling.
Baltimore accuses these operators of breaching its Consumer Protection Ordinance by offering casino-style games, despite online casino gambling being prohibited in the state. The lawsuit focuses on the industry’s “dual-currency” model, which is facing increasing scrutiny from lawmakers nationwide, with several states moving to ban sweepstakes casinos.
While Baltimore’s legal action is not directly related to prediction markets, Detroit’s involvement indicates a potential shift towards increased municipal engagement in gaming-related enforcement.