As more states are starting to take a firm stance against sports event trading, Michigan joins the bandwagon as well. The Michigan Gaming Control Board has confirmed that it has started investigations into sports event prediction platforms provided by unlicensed sports betting sites, with the Board issuing cease and desist letters.

As several states across the US begin cracking down on unregulated sports prediction markets, Michigan could be the next to take formal action. The Michigan Gaming Control Board has confirmed that it has launched investigations regarding sports prediction offerings from unlicensed operators, reflecting a growing concern about consumer protection in this emerging sector.

In a statement on Friday, an MGCB spokesperson confirmed that the agency is currently reviewing operations that may fall outside the bounds of state-regulated betting.

"The Michigan Gaming Control Board currently has investigations open regarding sports prediction markets offered in Michigan by unlicensed entities," the spokesperson said. The spokesperson continued, "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."

Active regulatory landscape

Michigan's regulators have had a busy week, further demonstrating the state's proactive stance on illegal gambling activity. The MGCB sent 13 C&D letters to unlicensed online casino and sportsbook operators - two letters on Tuesday and another 11 sent on Thursday last week.

The letters were part of a broader effort by the MGCB to monitor and enforce compliance in the state's online gaming market. So far, the agency has issued more than 30 C&D orders targeting offshore and illegal gambling operators.

The recipients of this week's letters include: Bet Big Dollar, Blood Moon Casino, DogsFortune, Grand Eagle Online Casino, Highway Casino, Jumba Bet Casino, Las Atlantis Casino, Lucky Tiger Casino, Rich Palms Casino, Ruby Slots Casino, Shazam Casino, Slotsroom, and Spinfinity.

The MGCB found these entities in violation of several Michigan statutes, including the Michigan Gaming Control and Revenue Act, the Lawful Internet Gaming Act, and the Michigan Penal Code. "The agency continues to monitor the online gaming landscape to ensure that all operators within the state comply with the highest standards of consumer protection, fairness and security," the spokesperson added.

A nationwide crackdown

The regulatory focus on sports prediction markets isn't unique to Michigan. States such as New Jersey and Nevada have recently sent cease-and-desist letters to Kalshi, a trading platform accused of operating unlicensed sports betting markets. Kalshi has responded with lawsuits against both states, arguing that its platform is distinct from traditional sports betting.

Other states, including Illinois and Ohio, have followed suit, issuing cease-and-desist letters to Crypto.com, Kalshi, and Robinhood for allegedly offering unregulated sports prediction products. Additionally, Louisiana, Connecticut, Massachusetts, Washington, and Kansas are reportedly investigating the growing trend.

Federal oversight and future implications

At the federal level, the Commodity Futures Trading Commission is keeping a close watch on the issue. As the national regulator of event-based trading markets, the CFTC is expected to hold a roundtable discussion soon to address the implications of sports prediction markets. Representative Dina Titus of Nevada, a longtime advocate for responsible gambling legislation, has urged the CFTC to suspend all sports event trading until a clearer regulatory framework is in place.

With both federal and state-level scrutiny increasing, Michigan's move to investigate unlicensed prediction markets could signal the beginning of a greater shift in how these platforms are monitored and regulated. As the popularity of prediction markets grows, regulators across the country appear poised to ensure that consumer safety and legal compliance remain a top priority.