The Wolverine State gaming regulator said the platforms, which bypass its regulatory framework, have raised significant concerns about consumer protection.

It added that its investigations align with similar actions already taken by other state regulatory bodies, and are focused on how these markets could jeopardise the integrity of the legal sports betting system.  

It follows action taken by other US states including the issuing of cease-and-desist letters, as well as reported investigations.

Henry Williams, executive director of the MGCB, said: “We take consumer protection very seriously and are committed to ensuring that Michigan residents are engaging with safe and legal sports betting options.

“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.”

Michigan warns platforms risk confusing bettors

The MGCB warned the platforms risk creating confusion among bettors, as well as blurring the line between sports betting as entertainment and as a financial trading vehicle.

Potential harms posed to consumers by the prediction market sites include fraud, identity theft and inadequate data security, the MGCB said.

The regulator added the sites are not required to adhere to sports betting regulations like age verification, KYC protocols, AML measures, self-exclusion policies and integrity monitoring.

The lack of such controls, the body said, could leave consumers vulnerable to financial harm.

The MGCB is also concerned that promoting sports betting as an investment opportunity directly contradicts Michigan’s responsible gaming principles.

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