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The Michigan Gaming Control Board issued a warning in a memo to licensed operators in the state about offerings predictions markets to customers.
Predictions markets, such as Kalshi and Robinhood, have been a controversial topic in the gambling industry since the start of the year. Both operators are in legal battles in multiple states.
As of now, Kalshi and Robinhood are allowed to operate in every state, including Michigan, since they are regulated under the Commodity Futures Trading Commission. However, the Michigan Gaming Control Board (MGCB) does not want regulated online casinos or Michigan sportsbooks to offer any type of predictions market without consent.
MGCB threatens potential licensure issues
The MGCB is aware that predictions operators are offering sports contracts. It sent a memo to all state-licensed gaming operators, both online and retail, earlier on Friday.
PlayMichigan obtained the letter from the MGCB later Friday. In part, it read:
“The MGCB writes to make you aware that any involvement in the offering of sporting event contracts, directly or via an affiliate, key person, related business entity, or other association, will have implications relative to your licensure in Michigan.”
The letter specified what the MGCB deems as “any involvement.”
- Directly or indirectly operating, offering, or facilitating access to sporting event contracts in Michigan, except to the extent such contracts are approved by the MGCB and operated pursuant to Michigan law and an MGCB-issued license.
- Partnering, coordinating, or associating with an entity that operates, offers, or facilitates access to sporting event contracts in Michigan, except to the extent such contracts are approved by the MGCB and operated pursuant to Michigan law and an MGCB-issued license.
- Directly or indirectly operating, offering, or facilitating access to sporting event contracts in any jurisdiction other than Michigan in which a regulatory body, law enforcement agency, or other governmental authority has expressly objected to or acted in any way to prevent or cease the offering of sporting event contracts in such jurisdiction.
- Partnering, coordinating, or associating with an entity that operates, offers, or facilitates access to sporting event contracts in any jurisdiction other than Michigan in which a regulatory body, law enforcement agency, or other governmental authority has expressly objected to or acted in any way to prevent or cease the offering of sporting event contracts in such jurisdiction.
The MGCB also stated that it will continue to monitor the offerings of all licensed operators in the state.
MGCB seeks ‘prompt notice’ from sportsbooks
The MGCB expects any and all predictions offerings to go through the board.
“Each licensee is under an ongoing duty to notify the MGCB of any material change in licensing information, or any change in circumstance that is relevant to a licensee’s suitability.
“Accordingly, the MGCB expects any licensee that is actively pursuing any involvement in the offering of sporting event contracts will provide prompt notice to the MGCB.”
Prediction markets can be applied to sports, but it is not your prototypical wager. On Kalshi, customers can place a prediction on a game or event, at a certain price, similar to the stock market. Players are able to trade their position before the event ends.
The MGCB is looking to protect customers from unlicensed offerings, just as it did when issuing six cease-and-desist letters to unlaw operators earlier this week.
