A federal judge in Michigan denied Coinbase Financial Markets' request for a preliminary injunction to stop the state from enforcing its gambling laws against sports event contracts offered through Kalshi, finding the company was not likely to succeed on the merits. In an August 6 order, US District Judge Shalina D. Kumar rejected Coinbase's argument that the contracts are federally regulated derivatives under the Commodity Exchange Act and therefore shielded from Michigan's Lawful Sports Betting Act by the Supremacy Clause. The court said the contracts are likely not swaps under the Commodity Exchange Act and, even if they were, the federal law does not preempt Michigan's gambling regime. The order also rejected Coinbase's preemption theories, said enforcing state law does not make federal compliance impossible, and described one of the exchange's arguments as "applesauce." The Michigan Gaming Control Board was dismissed on sovereign-immunity grounds, while Dana Nessel and the board's directors remain defendants. The ruling adds to a broader legal split over whether CFTC-regulated event contracts can override state gambling law, a dispute that has also involved Kalshi, Polymarket, Robinhood and Crypto.com and may ultimately be resolved on appeal or by Congress.