The Michigan Gaming Control Board (MGCB) on Friday warned a broad collection of companies doing business in the gambling industry there to not be a part of the proliferation of sports events contracts on prediction markets.
Doing so, even peripherally, could impact the status of gaming licenses in the state, the memorandum asserted.
The MGCB, one of the most aggressive state regulatory boards in defending its borders against unlicensed operators, seemingly left out no part of a gambling ecosystem. And it left little gray area.
This could have major implications for some major sports betting companies.
The letter, attributed to MGCB Executive Director Henry Williams, targeted licensed commercial casinos, gaming-related commercial casino suppliers, Internet gaming operators, Internet gaming suppliers, sports betting operators, sports betting suppliers, and fantasy contest operators.
Williams warned operators that “any involvement in the offering of sports event contracts, directly or via an affiliate, key person, related business entity or other association will have implications relative to your licensure in Michigan.”
Who was the MGCB addressing?
Comprehensive in scope, but simple in message, the caution comes from a body that in the last two weeks issued cease-and-desist orders to 14 unlicensed online casinos. It also blocked the Bovada unlicensed offshore sportsbook in 2024.
Of the 15 authorized online gaming and sports betting tribes/casinos and platform providers in Michigan, four notables have at least tangential connections with prediction markets that offer sports events contracts or have discussed doing so in the future:
- DraftKings. CEO Jason Robins said to Bank of America analyst Shaun Kelly in September on sports event contracts: “We have to make sure that we have the right thing and we are prepared to do it. It’s pretty simple. I think the TAM [Total Addressable Market] opportunity is likely to be very significant in states that do not have legal online sports betting.” DraftKings, which has accounted for 28.6% of mobile sports betting handle in Michigan this year, has reportedly had talks about buying Commodity Futures Trading Commission-certified prediction market Railbird Exchange.
- FanDuel. The company partnered with CME to eventually open a prediction platform. CME CEO Terry Duffy said on a recent Odd Lots podcast that he is open to offering sports event contracts but that FanDuel has not yet expressed an interest. FanDuel is the Michigan mobile sports betting handle percentage leader with 36.5% share.
- PrizePicks. The company, which offers its peer-to-peer “Arena” daily fantasy sports game in Michigan, recently gained registration as a Futures Commission Merchant by the National Futures Association and is seeking a partner to launch PrizePicks Predict.
- Underdog. It also offers peer-to-peer daily fantasy sports in Michigan and has rolled out a predictions platform after partnering with the North American Derivatives Exchange as a tech provider.
