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Michigan continues to crack down on offshore casinos but has not taken yet action against predictions markets Kalshi and Robinhood. However, the MGCB told PlayMichigan on Friday the two companies are under investigation. Several other states have already issued cease-and-desist letters to those companies, including New Jersey, Illinois, and Ohio.
The Michigan Gaming Control Board (MGCB) is one of the more aggressive regulatory bodies in the US. In other cases, it has often been one of the first states to take action against new products that it considers to be illegal gambling. The MGCB offered the following response to PlayMichigan in regards to Kalshi and Robinhood:
“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.”
Kalshi and Robinhood have taken the gambling industry by storm when it started offering sports predictions, which does not constitute as sports betting against the “house.” The companies provide event contracts that can be traded before the expiration date. They are regulated by the Commodity Futures Trading Commission (CFTC).
In the meantime, the MGCB banned 13 illegal, offshore casinos this week. The Great Lakes State allows 15 legal online casinos.
MGCB taking action, but not against Kalshi, Robinhood
The MGCB has been quiet on the latest predictions markets operating within the state, despite other states making a move. However, it is certainly on the regulator’s radar.
New Jersey, which has a similar online gambling landscape to Michigan because of online casinos, said that Kalshi is “listing unauthorized sports wagers for individuals.” The letter went on to read:
“This activity constitutes a violation of the New Jersey Sports Wagering Act, which only permits licensed entities to offer sports wagering to patrons located in New Jersey.”
Kalshi and Robinhood started offering sports markets during the Super Bowl, and continued through March Madness last month. It remains to be seen whether or not the MGCB joins in on taking action.
The MGCB issued cease-and-desist letters to 13 different offshore casinos this week. On Thursday, it contacted 11 operators, instructing them to immediately stop taking wagers. These companies violated the Lawful Internet Gaming Act, the Michigan Gaming Control and Revenue Act, and the Michigan Penal Code.
MGCB Executive Director, Henry Williams, said in a statement on Thursday:
“The Michigan Gaming Control Board remains fully committed to ensuring a fair, safe, and lawful gaming environment for all Michigan residents. Our actions today underscore our unwavering dedication to holding illegal operators accountable.
“Shutting down these unlicensed platforms is critical not only to maintaining the integrity of Michigan’s regulated gaming industry but also to protecting residents from predatory practices and unreliable gambling experiences.”
As Williams alluded to, a mission of the MGCB’s is to keep the integrity of legal gambling in the Great Lakes State. Will the MGCB take a stand on predictions markets? Only time will tell.
