Michigan regulator registers concern over event contracts with CFTC
The Michigan Gaming Control Board has written to the Commodity Futures Trading Commission outlining its concerns about sports event contracts being offered in the state.
The letter, addressed to the derivatives regulator’s Acting Chairperson Caroline Pham, argued that sporting contracts, which are based on the outcome of a sports event, are tantamount to internet sports betting and as such fall under the requirements of Michigan’s Lawful Sports Betting Act.
Michigan Gaming Control Board Executive Director Henry Williams emphasized that such activities must comply with the Lawful Sports Betting Act’s regulatory framework to ensure legality and consumer protection.
Williams expressed concern that offering these contracts without a sports betting operator license may violate Michigan law. “The offering of sporting event contracts by CFTC-regulated entities, without adherence to Michigan’s licensing requirements, exposes residents to unnecessary risk”, he said.
The letter also noted that promoting these contracts as investment opportunities conflicts with Michigan’s responsible gaming principles.
Michigan’s Lawful Sports Betting Act mandates strict standards, including licensing and background checks for operators, responsible gaming tools, consumer protections like secure fund handling, and event integrity monitoring.
Williams also highlighted that unregulated contracts could reduce state revenue, with legal sports betting generating over US$20 million in taxes and fees in 2024 for public services and responsible gaming programs.
The betting regulator urged the Commodity Futures Trading Commission to evaluate whether these contracts serve the public interest, citing potential financial harm to consumers and the erosion of Michigan’s regulated sports betting market.
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