The Michigan Gaming Control Board (MGCB) has opened an investigation into unlicensed sports prediction markets operating within the state.
The regulator accuses the platforms of bypassing Michigan’s regulatory framework, raising significant concerns about consumer protections.
The MGCB’s investigations align with similar actions taken by six other state regulatory bodies against trading platforms Kalshi, Robinhood and Crypto.
“We take consumer protection very seriously and are committed to ensuring that Michigan residents are engaging with safe and legal sports betting options,” said MGCB executive director Henry Williams. “Unlicensed entities not only pose a risk to consumers but also undercut the integrity and revenue-generating potential of the state’s regulated sports betting industry.
“We are actively investigating these practices and will pursue appropriate measures to protect Michigan bettors.”
The MGCB said the unlicensed platforms create potential confusion among bettors and “blur the line between sports betting as entertainment and sports betting as a financial trading vehicle”, directly contradicting Michigan’s established responsible gaming principles.
The regulator also raised concerns about lost tax revenue, and the potential for Michigan residents to be exposed to fraud, identity theft and inadequate data security.
“Sports betting is meant to be a form of entertainment, not a financial investment,” Williams explained. “By framing sports contracts as investment vehicles, these platforms risk confusing consumers and undermining the state’s commitment to responsible gaming.
“Moreover, many of these unlicensed platforms are often accessible to individuals as young as 18, in stark contrast to Michigan’s 21+ age requirement for legal sports betting.”
Last week Kalshi won a temporary reprieve in Nevada to allow the trading platform to continue to offer event-based sports contracts under its authorisation from the Commodity Futures Trading Commission (CFTC), which is the federal regulator for all futures markets.
In recent months, the MGCB has been focussing its attention on unlicensed online gambling operators in the state, issuing cease and desist letters to more than 50 illegal offshore gambling sites already this year.