Michigan regulator probes unlicensed sports predictions market
Announced on Friday (11 April), the MGCB said this activity has raised “significant” concerns about consumer protections in Michigan. The regulator classes predictions as a form of sports betting.
Preliminary investigations by the MGCB have found unlicensed platforms offer financial products that allow users to trade their predictions on the outcomes of sports events. By sidestepping state-mandated regulatory protections, the regulator said, this poses a serious risk to players.
The MGCB added that this may create confusion among consumers. Its concerns primarily relate to “blurring the line” between sports betting as entertainment and as a financial trading vehicle.
The regulator’s announcement did not specify the companies under scrutiny, but counterparts in five other states – Nevada, New Jersey, Ohio, Illinois and Maryland – have already send cease-and-desist letters to entities including Kalshi, Robinhood and Crypto.com to try to stop their sports-related offerings. The operators maintain they are legal under federal regulation and are fighting back in court against some of those orders.
“Sports betting is meant to be a form of entertainment, not a financial investment,” MGCB executive director Henry Williams said. “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.”
Players remain at risk from unlicensed sites
The regulator continued by saying that while lost tax revenue is an issue due to unlicensed activity, its main concerns related to player protection. It said unregulated platforms may expose Michigan residents to various risks such as fraud, identity theft and inadequate data security.
Unlicensed sites are not required to operate in line with protection measures in the state and as such consumers can be left vulnerable to financial harm. Approved operators must have in place measures such as including age verification, know your customer (KYC) protocols, anti-money laundering (AML) measures, self-exclusion policies and integrity monitoring, as per their licence requirements.
“We take consumer protection very seriously and are committed to ensuring that Michigan residents are engaging with safe and legal sports betting options,” Williams said.
“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 added that it will continue to investigate and take all necessary steps as deemed appropriate.
Illegal gambling crackdown continues in Michigan
This represents the latest step by the MGCB to tackle unlicensed gambling in Michigan. Earlier this month, the regulator issued cease-and-desist letters to 13 offshore operators for offering online gambling without a licence.
The regulator flagged Lucky Tiger Casino and Rich Palms Casino for illegal operations. The casinos, both operated by Alistair Solutions NV in Curaçao, offer gambling by slots, table games and video poker.
It also sounded out Shazam Casino, Highway Casino, SlotsRoom, Ruby Slots Casino, Las Atlantis Casino, Bet Big Dollar Casino, Blood Moon Casino, Spinfinity, Jumba Bet Casino, Grand Eagle Online Casino and DogsFortune for illegally targeting players in Michigan.