The Michigan Gaming Control Board is the latest regulator in the United States to issue a fair warning to commercial casinos and licensed betting and gaming operators to keep their distance from prediction markets and associations with any event contract platforms.
Failure to comply, the regulator warned in a memo sent to licensees on Friday, October 3, could result in the companies’ licenses being revoked by the watchdog. Providing or facilitating sports event contracts is not legal, the regulator argued.
Pushback against event contracts continues as Michigan joins the opposition
MGCB Executive Director Henry Williams said that no coordination, partnering, or association with such products or their providers could be established by licensed gaming companies that were currently licensed under the existing regulatory framework in Michigan.
Yet, the laws around this are not clear. Arizona, Massachusetts, New Jersey, and others have assaulted event contract platforms, such as Kalshi, arguing that the sports prediction markets/event contracts were in clear breach of each respective jurisdiction’s gambling laws.
In Massachusetts, Attorney General Andrea Joy Campbell has outright accused these platforms of looking for a roundabout way to avoid gambling regulation. For their part, prediction markets have maintained that there was nothing illegal in the offer.
In fact, gambling regulators have nothing to do with the oversight of prediction market platforms, insist companies such as Kalshi and Polymarket. This is left to the Commodity Futures and Trading Commission (CFTC), but gambling watchdogs have insisted otherwise.
Kalshi has even launched a sports parlay product, which is now gaining steady traction with consumers. Kalshi has similarly insisted that prediction markets are simply the superior product, whereas sportsbooks offer an inferior way of engaging with sports, but this didn’t mean that what the company offered was, in fact, gambling or subject to this type of regulation.
Mainstream companies won’t be able to push into event contracts in Michigan
Michigan, stating that companies may not offer prediction markets, though, also limits licensed gambling operators’ ability to expand against the onslaught of event-based contract platforms. Mainstream sportsbooks are grumbling against the way Kalshi and others offer sports event contracts, but they are also keen to get in on the action.
While Kalshi may not be beholden to local regulation in the Great Lakes State, companies such as FanDuel and DraftKings cannot simply ignore the memo and will have to put on hold any plans about prediction markets they may have had.
