The Michigan Gaming Control Board (MGCB) sent cease-and-desist letters to eight companies that are thought to be involved in illegal online casino operations.
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MGCB notifies sportsbooks not to provide prediction markets
The Michigan Gaming Control Board, in addition to several other US jurisdictions, warned licensed sportsbook operators that offering sports event prediction markets could put their licenses at risk.
The most recent state gaming commission to warn sportsbooks against entering the prediction markets is the Michigan Gaming Control Board (MGCB). In a memo it sent operators last week, the MGCB warned that participating in sports event contracts directly or indirectly would jeopardize their gaming licenses.
The MGCB is cautioning that involvement in the offer of contracts for sporting events, whether directly or indirectly through an affiliate, a key individual, a related business entity, or another association, will affect the Michigan gambling license, according to a memo released by the regulator. In April, the MGCB started looking into sports prediction markets as regulatory worries spread across the country.
The warning comes after similar moves by the Arizona Department of Gaming and Ohio Casino Control Commission, both of which have shown concerns about sportsbooks entering event-based markets. State officials assert that such products are similar to illegal sports betting, though at a federal level, they are regulated by the U.S. Commodity Futures Trading Commission (CFTC).
Several operators have indicated they are interested in prediction markets, such as Underdog via a partnership with Crypto.com and FanDuel via a joint venture with CME Group. DraftKings CEO Jason Robins has also openly explored entering the market.
The crisis escalated after Massachusetts Attorney General Andrea Campbell brought a suit against Kalshi, stating that:
“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences. This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a licence and follow our laws. I am grateful for the ongoing partnership with the Gaming Commission.”
Kalshi and Robinhood have continued to grow their event contracts, even while authorities throughout the nation indicate stricter enforcement is on the horizon.
In September, the three casinos in Detroit, Michigan, reported a combined revenue of $98.2 million, marking a 3% drop compared to the same month last year.
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