Michigan Investigates Unlicensed Sports Prediction Markets

The Michigan Gaming Control Board (MGCB) has launched a formal investigation into the operation of unlicensed sports prediction markets within the state, citing significant consumer protection concerns. The regulator announced the probe on Friday, April 11, amid growing scrutiny over platforms offering financial products based on the outcomes of sporting events.

According to the MGCB, preliminary findings suggest that some platforms, operating without state licenses, are allowing users to buy and sell predictions on sports outcomes. While this activity may resemble traditional sports betting, the MGCB argues that these products function more like financial instruments—blurring the line between gambling and investment.

Regulatory Ambiguity and Consumer Risk

The MGCB has emphasized that its core concern is consumer safety. Unlicensed platforms, the agency warns, do not adhere to Michigan's stringent regulatory safeguards, which include age verification, know-your-customer (KYC) protocols, anti-money laundering (AML) measures, and responsible gaming tools. These requirements are designed to protect users from fraud, identity theft, and financial harm.

“Sports betting is meant to be a form of entertainment, not a financial investment,” said 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.”

Michigan law restricts legal sports betting to individuals aged 21 and older. However, many unlicensed platforms are accessible to users as young as 18, further deepening the MGCB’s concerns over vulnerable populations being exposed to potentially exploitative practices.

Michigan is not alone in its response to the rising prevalence of sports prediction markets. Regulatory agencies in Nevada, New Jersey, Ohio, Illinois, and Maryland have already issued cease-and-desist orders to companies offering similar services, including high-profile names such as Kalshi, Robinhood, and Crypto.com. These firms maintain that their products are legal under federal financial regulations and are currently challenging state-level actions in court.

While the MGCB has not named specific companies under investigation, its statements align with broader national efforts to delineate the boundaries between financial trading platforms and sports wagering.

Revenue vs. Responsibility

Although the proliferation of unlicensed gambling activity also raises issues of lost tax revenue, the MGCB maintains that player protection remains the primary driver behind its enforcement actions.

“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,” Williams noted. “We are actively investigating these practices and will pursue appropriate measures to protect Michigan bettors.”

This latest action follows an earlier crackdown this month, in which the MGCB issued cease-and-desist letters to 13 offshore operators for offering unauthorized online gambling services to Michigan residents. Offshore entities such as Lucky Tiger Casino and Rich Palms Casino—operated by Curaçao-based Alistair Solutions NV—were cited for illegally providing slot games, table games, and video poker.

Other flagged platforms included Shazam Casino, Highway Casino, Ruby Slots Casino, and Blood Moon Casino, among others.

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.

Looking Ahead

The MGCB's investigation into sports prediction markets marks a significant moment in the evolving intersection between finance and gambling. As digital platforms increasingly offer hybrid products that challenge traditional regulatory frameworks, state agencies face mounting pressure to adapt oversight mechanisms that preserve consumer trust while fostering legal innovation.

For now, Michigan residents are advised to verify that any gambling or prediction platform they use is licensed by the state. The MGCB has reiterated its commitment to enforcing existing laws and ensuring a secure, transparent, and fair betting environment.