MGCB Announces Unlicensed Sports Prediction Market Crackdown

At the end of March, the Michigan Gaming Control Board (MGCB) made another effort to put an end to unlicensed operators in the state by targeting five additional offenders. 

Now, the same board responsible for guaranteeing “the conduct of fair and honest gaming to protect the interests of the citizens of the state of Michigan” is cracking down on unlicensed sports prediction markets that have been popping up online, raising red flags about the future of legal sports betting in the Great Lakes State.

The Future of Legal Betting at Stake

MGCB has initiated an investigation into these platforms that basically enable users to “trade” predictions on sporting events, similarly to sports betting, minus the obligation of following state regulations.

According to MGCB’s executive director, Henry Williams, these unauthorized platforms threaten not only consumers but also the integrity of Michigan’s legal sports betting system.

“We take consumer protection very seriously and are committed to ensuring that Michigan residents are engaging with safe and legal sports betting options,” Williams said. 

The executive director further added that unlicensed entities do not only “pose a risk to consumers but also undercut the integrity and revenue-generating potential of the state’s regulated sports betting industry.”

The official also reiterated that they will take the “appropriate measures to protect Michigan bettors.”

Confusing Marketing May Attract Younger Users

The concern isn’t just about lost tax revenue, though that’s part of it. These so-called “prediction markets” introduce themselves as innovative financial tools, blurring the line between wagering for fun and investing for profit. 

The MGCB fears that this kind of framing can confuse consumers and potentially lure in younger users who might not fully understand the risks.

“Sports betting is meant to be a form of entertainment, not a financial investment,” Williams said. 

He added that, by showcasing sports contracts as investment opportunities, these platforms risk misleading consumers while weakening the state’s efforts to promote responsible gaming. 

Even more, many of these unlicensed sites can be accessed by users as young as 18, which is in direct conflict with the state’s legal age requirement of 21 for sports betting.

The state is especially concerned about platforms that don’t follow basic protections like identity checks, data security, or self-exclusion options for problem gamblers. 

Licensed sportsbooks in Michigan must adhere to strict rules around age verification, anti-money laundering procedures, and responsible gaming. These offshore or rogue operators do not.

The board that “provides Detroit commercial casinos gaming operations licensing and regulation,” among others, says it will keep digging into these sites and won’t hesitate to take enforcement action if needed. 

For now, Michigan bettors are being urged to use legal, licensed platforms and avoid anything that seems too good or too risky to be true.