MGCB Calls on CFTC to Address Sports Betting Contracts
The Michigan Gaming Control Board has formally expressed its concerns to the Commodity Futures Trading Commission (CFTC) about the potential risks and implications of sports betting contracts in Michigan.
LISTEN TO THIS ARTICLE:In a letter sent to Acting Chairperson Caroline Pham, MGCB Executive Director Henry Williams said that sports events contracts that involve trading on game outcomes are akin to sports betting and should be governed by the Lawful Sports Betting Act (LSBA).
According to MGCB, any online sports betting offerings must adhere to the LSBA, which governs and promotes integrity and responsibility in Michigan's sports wagering market.
The regulator notes that platforms offering sports event contracts without MGCB approval risk being classified as illegal gambling operators under Michigan law.
The offering of sporting event contracts by CFTC-regulated entities, without adherence to Michigan's licensing requirements and in a manner that may not meet prescribed consumer protections, exposes Michigan residents to unnecessary risk and undermines public trust. We are particularly concerned that such contracts are being promoted as investment opportunities, a message that directly contradicts Michigan's responsible gaming principles.
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Michigan Requirements for Legal Betting
In the letter, the MGCB specifies four crucial regulatory standards governing the state's online sports betting and sports prediction offerings. They include licensing and oversight requirements for operators, like thorough background checks, and responsible gaming measures, such as self-exclusion programs.
The other two are consumer protection safeguards, such as complaint resolution options and event integrity protocols, that require MGCB approval and monitoring for events and wagers.
The MGCB also warned that channeling sports betting activity away from licensed operators could result in revenue losses for state, local, and tribal governments in Michigan.
Growing Crackdown on Unregulated Platforms
The MGCB wrote the letter after launching a probe into platforms offering sports-related events contracts in Michigan, like Kalshi and Robinhood. Other states like Nevada, New Jersey, and Illinois have taken a more aggressive approach by sending cease-and-desist letters to the sites.
In a recent development, the MGCB has welcomed a new Chair. Governor Gretchen Whitmer has appointed Jim Ananich to head the MGCB board, effective April 25. Ananich replaces Linda Forte, whose term recently expired.
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