The Michigan Gaming Control Board (MGCB) has warned that gambling operators and other parties seeking to get into the fast-growing prediction markets space that their licenses could be revoked. This comes as regulators and regulated industry stakeholders continue to argue that prediction markets constitute unregulated sports betting.
Prediction Markets Have Continued to Grow Despite the Pushback
In a recent memo, Henry Williams, executive director of the MGCB, said that the authority has understood that some of its licensees are interested in operating, offering, or facilitating access to prediction markets.
For context, prediction markets are event-based contracts that participants can buy or sell. As such, these products fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
However, traditional sports betting industry regulators, commercial operators and tribal entities have slammed prediction markets as unregulated betting that circumvents traditional regulatory frameworks. They have pointed out that whereas sportsbooks have to navigate a complex regulatory landscape, the CFTC approval allows prediction markets to operate across the entirety of the US.
Michigan, among other states, has firmly rejected the prediction markets model, warning participants that they risk having their licenses revoked.
Michigan Takes a Stance Against the Controversial Sector
In Williams’s memo, he emphasized that prediction markets do not operate in accordance with Michigan’s gambling laws and that entering the space will have “implications” relative to operators’ licensure in the state.
As the MGCB fulfills its statutory duty to monitor and evaluate each licensee’s continued suitability for licensure, it will consider whether the licensee and its affiliates, key persons, related business entities, and any other associates are involved in the offering of sporting event contracts in Michigan and other jurisdictions.
Memo excerpt
The MGCB made it clear that partnering with prediction markets or facilitating access to their offerings will also carry certain risks.
Michigan isn’t the only state to oppose prediction markets, as Ohio and Arizona have also issued similar warnings.