The fight against illegal sports betting in Michigan is being amped up after the Michigan Gaming Control Board (MGCB) launched an investigation into unlicensed sports prediction markets within the state.
These platforms allegedly bypass Michigan’s regulatory framework, raising significant concerns about consumer protection.
Michigan’s investigations align with actions taken by other state regulatory bodies, focusing on how unlicensed sports betting may jeopardize the state’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," said Henry Williams, Executive Director of the MGCB, in a statement.
"Unlicensed entities not only pose a risk to consumers but also undercut the integrity and revenue-generating potential of the state's regulated sports betting industry. We are actively investigating these practices and will pursue appropriate measures to protect Michigan bettors," Williams added.
Michigan's legal online sports betting platforms include sites like DraftKings, Fanatics, BetMGM, BetRivers, and Caesars.
The Risks of Unregulated Sports Prediction Platforms
Unlicensed platforms offer users the ability to trade predictions on sports event outcomes.
By sidestepping Michigan’s regulated sports betting market protections, these platforms expose consumers to various risks, including fraud, identity theft, and inadequate data security.
Unlike licensed sportsbooks, unregulated platforms may operate without safeguards such as age verification, Know Your Customer (KYC) protocols, anti-money laundering (AML) measures, self-exclusion policies, and integrity monitoring. As a result, consumers may face financial harm.
The MGCB is also concerned that promoting sports betting as an investment opportunity contradicts Michigan’s established responsible gaming principles.
"Sports betting is meant to be a form of entertainment, not a financial investment," Williams added. "By framing sports contracts as investment vehicles, these platforms risk confusing consumers and undermining the state's commitment to responsible gaming. Moreover, many of these unlicensed platforms are often accessible to individuals as young as 18, in stark contrast to Michigan's 21+ age requirement for legal sports betting."
Michigan Has a Storied History of Sports Betting and Online Casinos
The history of sports betting and online casinos in Michigan is a tale of gradual regulation and expansion. In 1996, Michigan voters approved a proposal that allowed for the establishment of three commercial casinos in Detroit. Over the years, Native American tribes also opened casinos across the state, contributing to a thriving gambling industry.
However, it wasn’t until December 2019 that Michigan legalized sports betting and online gaming.
The legislation marked a significant expansion for the state’s gambling industry, permitting both online and retail sports betting. The first legal sports bets were placed in March 2020, just before the COVID-19 pandemic temporarily shut down gambling venues. In January 2021, Michigan launched its online casinos and sports betting platforms, quickly becoming one of the most active markets in the United States.
Today, Michigan operates a well-regulated sports betting and online casino industry, with strict consumer protection measures in place. These include age verification, identity checks, and responsible gaming practices designed to protect consumers and maintain the industry’s integrity. Whatever they're doing, it appears to be working because online casinos in The Wolverine State experienced a record year in 2024.
The emergence of unlicensed sports prediction markets poses a challenge to the integrity and revenue of Michigan’s legal framework. As the MGCB continues its investigations, the focus remains on ensuring that Michigan residents can engage in safe and legal betting activities.
