Michigan Targets Unlicensed Sports Prediction Markets

The Michigan Gaming Control Board (MGCB) has opened an investigation into sports prediction markets operating without a license in the state. These platforms, which allow users to place financial stakes on the outcome of sporting events, have raised red flags over the lack of consumer safeguards and regulatory oversight.

In an announcement made on April 11, the MGCB expressed that these services—though often presented as trading platforms—fall under the category of sports betting under Michigan law. The regulator emphasized that bypassing the state’s regulatory framework exposes users to considerable risks, including fraud, data breaches, and misuse of personal information.

Entertainment or Investment? State Pushes Back on Grey Area

According to the MGCB, the core issue lies in how these unlicensed platforms “blur the line” between sports betting as a form of entertainment and as a vehicle for financial speculation. The agency warned that this recharacterization could mislead consumers into treating gambling as a legitimate investment opportunity.

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

While the MGCB did not disclose the names of specific companies under investigation, similar enforcement actions have already been taken in states like Nevada, New Jersey, Ohio, Illinois, and Maryland. In those states, cease-and-desist orders were issued to entities such as Kalshi, Robinhood, and Crypto.com, all of which maintain that their offerings are federally compliant and are contesting the orders in court.

Regulatory Safeguards Lacking in Unlicensed Operations

Unlike Michigan’s approved sportsbook operators—who must implement measures such as age verification, KYC protocols, anti-money laundering safeguards, and self-exclusion tools—these unlicensed platforms often have few to no such protections in place. The MGCB warned that this opens the door to identity theft, financial exploitation, and access by underage users.

“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,” Williams added.

While the loss of tax revenue is a concern, the MGCB noted that the primary motivation for the investigation is the need to protect consumers. Williams reaffirmed that unlicensed operators compromise not only player safety but also the integrity and viability of the state’s legal betting market.

“We take consumer protection very seriously and are committed to ensuring that Michigan residents are engaging with safe and legal sports betting options,” he said.

Broader Enforcement Efforts Continue

This investigation is part of a broader crackdown on illegal gambling activities in Michigan. Earlier in April, the MGCB sent cease-and-desist notices to 13 offshore gambling sites, including Lucky Tiger Casino and Rich Palms Casino. These sites, managed by Curaçao-based Alistair Solutions NV, were found offering slot machines, table games, and video poker to Michigan residents without proper licensing.

Others cited in the enforcement action include 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.

As the probe into prediction markets advances, the MGCB confirmed it would “continue to investigate and take all necessary steps as deemed appropriate” to uphold the legal gambling environment in the state.

Source: 

MGCB Cracks Down on Unlicensed Sports Prediction Platforms, World Casino Directory, April 14, 2025