Michigan regulator cracks down on sports prediction markets

Michigan has launched a formal investigation into sports prediction markets, which the regulator says are operating outside the state’s regulatory framework. The move places Michigan among a growing number of U.S. states taking action against these platforms.

The Michigan Gaming Control Board (MGCB) is examining platforms that enable users to trade predictions on sporting outcomes without complying with state laws governing legal sportsbooks. These entities, according to regulators, present risks to consumer safety and the financial stability of Michigan’s regulated gaming industry.

“We take consumer protection very seriously and are committed to ensuring that Michigan residents are engaging with safe and legal sports betting options,” said Henry Williams, Executive Director of the MGCB. 

“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.”

Unlike licensed sportsbooks, which must meet strict standards, including age verification, anti-money laundering protocols, and data security measures, the regulator says these unregulated markets operate without oversight. The MGCB warns that users may be vulnerable to fraud, identity theft, and financial exploitation, especially since many of these platforms lack basic consumer protections.

The platforms under scrutiny often advertise their offerings as “innovative financial products,” inviting users to treat wagers as investment opportunities. This framing, regulators argue, directly contradicts Michigan’s responsible gaming principles.

“Sports betting is meant to be a form of entertainment, not a financial investment. By framing sports contracts as investment vehicles, these platforms risk confusing consumers and undermining the state’s commitment to responsible gaming,” Williams said. 

“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.”

Michigan’s action follows similar enforcement steps taken by six other states, namely Maryland, Ohio, Illinois, New Jersey, Nevada, and Montana, all of which have issued cease-and-desist letters to prediction market operators.

Despite the fact that legal sports betting is permitted only in select jurisdictions, these platforms have established a national footprint, offering services in all 50 states by circumventing traditional regulatory pathways.

The MGCB stated that its primary concern lies with public confusion and the erosion of trust in the state’s regulated gaming environment. The board has pledged to continue its investigations and take enforcement action as needed to ensure that all sports wagering conducted in Michigan adheres to legal and responsible standards.