Concerns raised to the CFTC around sporting event contracts in Michigan

The MGCB has addressed the CFTC to directly express concern around sports events contracts.

The Michigan Gaming Control Board (MGCB) has directly addressed the Commodity and Futures Trading Commission (CFTC) to voice its apprehension pertaining to the offering of sports events contracts in the state.  

Indeed, a letter has been submitted to CFTC Acting Chair Caroline Pham by MGCB Executive Director Henry Williams has highlighted that, due to the fact that sports events contracts can be defined as financial positions based on the outcome of a sports event, the contracts should be subject to the Lawful Sports Betting Act (LBSA).

The events contract operators would, no doubt, argue this definition. However, in the eyes of the MGCB, they are currently circumventing Michigan law – as any and all forms of sports betting must be subject to the LBSA.  

Speaking on this development, Henry Williams stated, “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.  

Good to know: The MGCB’s letter outlines four key areas – including; licensing & oversight, responsible gaming, consumer protection and event integrity  

“We are particularly concerned that such contracts are being promoted as investment opportunities, a message that directly contradicts Michigan’s responsible gaming principles. The potential for financial harm to both consumers and government programs is real. Any erosion of the legal, regulated sports betting market undermines the very safeguards we have in place to protect Michiganders.” 

Also outlined as part of its CFTC address, the MGCB has noted that sports events contracts could be turning business away from licensed sports betting operators in the state, affecting both the market and its tax revenues.  

Will Underwood

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