Michigan Attorney General Dana Nessel reissued a warning to consumers about sweepstakes as part of National Consumer Protection Week, telling residents that some promotions are used to mislead consumers rather than fairly market products or services.
Key Takeaways
- Michigan reissued a consumer alert warning that some sweepstakes promotions are used to deceive consumers.
- The alert said buying a product does not improve the chance of winning because sweepstakes are games of chance.
- Residents were warned not to pay fees or provide financial or personal information to claim a prize.
The alert focused on how sweepstakes casinos work, what legitimate operators can and cannot do, and which warning signs should prompt consumers to walk away. Nessel said some promotions are run honestly, but others are designed to collect money or sensitive personal information from people who believe they have won a prize.
The Attorney General's office described sweepstakes as advertisements meant to draw attention to a company's goods or services by offering consumers a chance to win a prize. The alert said consumers should read the fine print before entering and avoid giving bank account details or other sensitive information in advance.
It also stressed that buying something from the sponsoring company does not increase the chance of winning.
Sweepstakes casinos are games of chance, and the winner is not known until the promotion has ended. Each entry has the same chance of success.
Another warning involved fake prize claims. The alert said that if someone must pay a handling fee, shipping charge, or any other amount to receive a prize, then the prize is not legitimate. It also said that no legitimate sweepstakes company asks consumers to prepay taxes to release winnings.
Residents were also told to ignore misleading envelopes marked with urgent language or threats. In telemarketing calls tied to prize promotions, callers must disclose the odds of winning, that no purchase is required, how to enter for free, and any conditions attached to receiving a prize.
While only a reminder this time, Michigan officials have sent cease-and-desist letters to sweepstakes operators in the past, claiming that their activities constitute unauthorized betting under Michigan law.
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Michigan seeks court order against Kalshi
That broader consumer protection push has also extended into gaming enforcement. Nessel has filed a lawsuit against Kalshi, arguing that the company is offering unlicensed sports betting to Michigan residents through its prediction market platform.
The complaint said Kalshi lets users trade contracts tied to the likely outcome of events, but the state argues those contracts function as sports wagers.
Michigan alleges that this activity violates the Lawful Sports Betting Act, which requires operators to be licensed through the Michigan Gaming Control Board.
The state is asking the court to declare Kalshi a sports betting app and permanently block it from operating in Michigan. The complaint also said that only state-licensed casinos or federally authorized tribal casinos can apply for a sports betting operator license. Kalshi does not qualify under either category.
Michigan is the third state to sue Kalshi. In addition to the lawsuits, several states have issued cease-and-desist orders to it and other prediction market platforms.
