Michigan confirms investigation into prediction markets over "consumer protection" fears
MGCB becomes latest state regulator to reveal it is looking into the sector to ensure players are “safeguarded,” but has refrained from issuing cease-and-desist orders so far
The Michigan Gaming Control Board (MGCB) has confirmed it is in the midst of an investigation into sports event contracts and the presence of prediction markets in the state.
While the MGCB has told EGR that it has not issued any cease-and-desist orders to any company at this time, the regulator has disclosed it aims to tackle “consumer protection” concerns related to the burgeoning sector.
A spokesperson for the MGCB said: “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 Colorado Department of Revenue’s gaming division has also revealed it is “paying close attention to the current events as they unfold”.
At the time of writing, four states have issued such warnings to the most prominent firms behind the rise of sports event contracts.
Kalshi has been the subject of four cease-and-desist warnings from the Nevada Gaming Control Board (NGCB), the New Jersey Division of Gaming Enforcement (DGE), the Ohio Casino Control Commission (OCCC) and the Illinois Gaming Board (IGB).
Retail brokerage firm Robinhood has also received similar orders from the DGE, the OCCC and the IGB, while Singapore-based cryptocurrency exchange Crypto.com was only directly addressed by regulators in Ohio and Illinois.
In response to the cease-and-desist instructions, Kalshi filed lawsuits against the NGCB and DGE within the last week, while its CEO Tarek Mansour took to social media to blast the authorities for misunderstanding prediction markets and undermining “the foundation of US financial markets, which are regulated by the federal government”.
The rollout of sports event contracts has seen federal authority, the Commodity Futures Trading Commission (CFTC), serve as regulator for the sector.
In turn, the likes of Kalshi, Robinhood, and Crypto.com have been able to expand their respective event contracts, which bear a striking similarity to traditional sports wagering, to users aged 18 and over in all 50 US states without state licences.
However, Kalshi is yet to issue similar lawsuits against either of the OCCC or the IGB.
Elsewhere, Arizona’s Department of Gaming and the North Carolina State Lottery Commission have both told EGR of their respective intentions to keep tabs on the outcomes of disputes in other jurisdictions before potentially intervening themselves.
The Kansas Racing and Gaming Commission has also explained that it is “monitoring” developments across the US before deciding whether to take action, as scrutiny on the sector continues to increase.
Meanwhile, Connecticut’s Department of Consumer Protection’s (DCP) gaming division has confirmed that it has been investigating Kalshi since the fall of 2024.
However, the DCP did not reveal how long the probe would last, nor what action could be taken as a result of the investigation.
Kalshi has declined to comment on the matter.
EGR has also contacted Robinhood and Crypto.com for comment.