All licensed gambling operators in Michigan received a sharp warning this week. MGCB Executive Director Henry Williams sent out an official memo. The message? Stay away from prediction markets.
Williams specifically called out operators thinking about offering sporting event contracts. These are products where people trade on future events. Companies like Kalshi and Crypto.com already offer them.
But the warning goes beyond direct operations. Affiliates count. So do key personnel and related business entities. Any connection to prediction markets could hurt an operator’s Michigan license.
Why Michigan Is Cracking Down Now
Several major operators have already jumped into this space. FanDuel teamed up with CME Group back on August 20. They’re building what they call “fully funded, event-based contracts with defined risk.”
Underdog Fantasy went a different route. They partnered with Crypto.com, which offers contracts based on specific event outcomes.
Williams made the state’s position crystal clear. These prediction market operations “would not operate in accordance with state gaming laws.” That’s not ambiguous.
The regulator isn’t just looking at in-state activity either. Even out-of-state trading of sporting event contracts would trigger enforcement action. Location doesn’t matter.
What Michigan Operators Face
The memo puts Michigan licensees in a tough spot. They need to choose between prediction markets and their existing licenses. Can’t have both.
Williams didn’t specify exact penalties. But he warned of “implications relative to your licensure in Michigan.” For operators, that language signals serious consequences.
The warning covers direct involvement and indirect connections. An affiliate partnership could be just as problematic as running the operation yourself.
Michigan isn’t defining specific boundaries yet. Operators will need to stay cautious about any prediction market relationships.
How Other States Are Following Suit
Arizona issued a similar warning on September 17. ADG Director Jackie Johnson sent letters to all licensed operators there.
Johnson’s language matched Michigan’s concerns. She said partnerships with companies selling event contracts in other jurisdictions “might impact a licensing decision.” Even if those operations happen outside Arizona.
Arizona already took enforcement action earlier this year. The state sent cease-and-desist letters to Kalshi, Robinhood and Crypto.com back in May 2025. Those companies were allegedly offering sports betting without proper licenses.
Arizona’s laws don’t clearly address prediction markets yet. But the regulator is treating them like unauthorised gambling operations anyway.
This coordinated state action could signal broader industry changes ahead. Operators with multi-state licenses need to watch these developments closely. The regulatory landscape is shifting fast.
