- The Michigan Gaming Control Board regulators today confirmed an open investigation into sports prediction markets
- The investigation aims to ensure residents are safeguarded against risks posed by “unregulated operators”
- The board has not yet taken any action against the markets
The Michigan Gaming Control Board has revealed it is holding an open investigation into the sports prediction markets.
A board spokesperson today confirmed the investigation with Sports Betting Dime, noting that state gaming regulators are aiming to ensure Michigan residents are safeguarded against potential risks posed by unregulated sports betting operators.
Despite the pending investigation, the Michigan Gaming Control Board has yet to take any action against prediction markets.
Will Cease-and-Desists Be Sent?
The spokesperson offered the following comment on the investigation to Sports Betting Dime:
“The Michigan Gaming Control Board currently has investigations open regarding sports prediction markets offered in Michigan by unlicensed entities. These investigations aim to address concerns about consumer protection and ensure that residents of Michigan are safeguarded against potential risks posed by unregulated operators. The MGCB has not issued cease-and-desist letters to such entities at this time,” the spokesperson said.
No further details were provided on the investigation or any potential timeline.
The MGCB is no stranger to issuing cease-and-desist notices to unlicensed sports betting and iGaming operators. It remains to be seen if the state will take similar action against Kalshi, Robinhood, or Crypto.com for their sports prediction markets.
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Will Michigan Take Same Course as Other States?
If Michigan does decide to prohibit sports event prediction markets, it will join four other states that have taken the same course.
Illinois, New Jersey, Ohio, and Nevada have all sent cease-and-desist orders for the markets. Both Illinois and Ohio sent notices to Kalshi, Robinhood, and Crypto.com, while New Jersey and Nevada only sent orders to Kalshi and Robinhood.
In response to the notices, KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB) this past week.
The company believes neither of the state regulatory bodies have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.
Counsel for Kalshi argues that Congress previously gave the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction to regulate futures trading on approved exchanges. As the CFTC has allowed Kalshi to launch its sports event contract markets, state law cannot “intrude on the comprehensive federal scheme for regulating designated exchanges.”
The company has yet to file lawsuits against either Illinois or Ohio.
The Michigan Gaming Control Board (MGCB) has recently announced that they are conducting an open investigation into sports prediction markets. This move comes as part of the state’s efforts to regulate and monitor the rapidly growing industry of online sports betting.
Sports prediction markets have become increasingly popular in recent years, allowing users to bet on the outcomes of various sporting events. These markets operate similarly to traditional sports betting, but with a focus on predicting specific outcomes rather than just the overall winner of a game.
The MGCB’s investigation will focus on ensuring that these prediction markets are operating in compliance with state laws and regulations. This includes ensuring that the platforms are licensed and regulated by the state, as well as monitoring for any potential issues such as fraud or manipulation.
One of the key concerns surrounding sports prediction markets is the potential for insider trading or manipulation of outcomes. By conducting this investigation, the MGCB aims to protect consumers and ensure fair play within the industry.
In addition to monitoring for compliance with state regulations, the MGCB will also be looking into the potential impact of sports prediction markets on traditional sports betting. As these markets continue to grow in popularity, there is a concern that they could cannibalize revenue from traditional sportsbooks.
Overall, the MGCB’s investigation into sports prediction markets is an important step in ensuring the integrity of the industry and protecting consumers. By regulating these markets effectively, the state can help to foster a safe and fair environment for sports betting enthusiasts in Michigan.