The Michigan Gaming Management Board (MGCB) has launched formal investigations into a number of unlicensed platforms providing sports-related prediction markets, flagging severe issues about shopper security and the erosion of state-regulated betting requirements. These platforms, together with Kalshi and Robinhood, are being scrutinized for providing monetary merchandise that allow customers to commerce predictions on sports activities outcomes—functioning exterior Michigan’s authorized sports activities betting framework.
Michigan aligns with nationwide pushback in opposition to occasion contracts:
The MGCB’s actions mirror enforcement steps taken by gaming authorities in different states, resembling Ohio, Nevada, New Jersey, and Connecticut. These regulatory our bodies have initiated cease-and-desist orders or court docket challenges concentrating on comparable operations. In Michigan, the main target is on how such unlicensed choices would possibly undermine the regulated betting market and confuse shoppers by presenting playing as a monetary buying and selling alternative.
“These platforms, which bypass Michigan’s regulatory framework, have raised important issues about shopper safety,” mentioned MGCB Government Director Henry Williams. “Unlicensed entities not solely pose a threat to shoppers but additionally undercut the integrity and revenue-generating potential of the state’s regulated sports activities betting trade. We’re actively investigating these practices and can pursue acceptable measures to guard Michigan bettors.”
Williams emphasised that positioning sports activities contracts as investments is at odds with Michigan’s rules on accountable playing. “Sports activities betting is supposed to be a type of leisure, not a monetary funding,” he said within the regulator’s press launch. “By framing sports activities contracts as funding autos, these platforms threat complicated shoppers and undermining the state’s dedication to accountable gaming.”
Key regulatory gaps and shopper safety dangers:
Not like licensed sportsbooks in Michigan, that are certain by laws together with age verification, anti-money laundering (AML) protocols, Know Your Buyer (KYC) procedures, self-exclusion methods, and integrity monitoring, these unlicensed platforms typically function with out such guardrails. MGCB warns that this lack of oversight will increase the danger of fraud, id theft, and misuse of delicate monetary knowledge.
Many of those platforms additionally permit entry to customers as younger as 18, which violates Michigan’s authorized sports activities betting age requirement of 21. This discrepancy provides to MGCB’s concern about potential hurt to underage customers and the broader impression on shopper belief.
The rise of those platforms blurs the road between regulated leisure and speculative buying and selling. MGCB officers observe that customers could also be misled into viewing these prediction-based markets as professional investments, which may undermine efforts to advertise accountable gaming habits.
A number of states are already pursuing authorized motion. In a single notable instance, Kalshi has challenged cease-and-desist orders in each Nevada and New Jersey courts, arguing that the Commodity Futures Buying and selling Fee (CFTC) holds jurisdiction beneath the Commodity Change Act. In parallel, Michigan can be contending with a authorized battle over federal versus state management in a separate case involving Churchill Downs and advance deposit wagering by way of its TwinSpires app.
In the meantime, MGCB continues to handle violations throughout numerous playing sectors. This contains issuing 13 new cease-and-desist letters to offshore casinos in the identical week it initiated the probe into sports activities prediction markets.
As investigations progress, the MGCB affirms its intent to pursue all needed actions to safeguard the state’s authorized playing setting. “We are going to proceed to analyze and take all needed steps as deemed acceptable,” the company said, highlighting its dedication to shopper safety and the integrity of Michigan’s regulated sports activities betting trade.
