The city of Detroit says it will investigate a water tower that was recently painted with the name and logo of the popular yet controversial prediction market platform Polymarket, which has been battling state Attorney General Dana Nessel over whether it can legally operate in Michigan.
The water tower with the "Polymarket" branding is the city's east side, not far from General Motor's Factory Zero and visible to passing motorists on I-94.
The tower is on the private property of an industrial concrete recycling business. City officials told the Free Press on Sept. 16 that they will investigate the site and determine whether the apparent advertisement needs a permit, as there is no permit on file.
Before the tower was painted dark blue to match
the Polymarket logo, it had displayed decades-old lettering for the "Zappie Fence Co."
Yet even as Polymarket appears to be raising its profile in Detroit, the company is operating in what appears to be a legal gray area in Michigan.
Polymarket is an online platform that lets customers place wagers on the outcomes of future events, many of them sports.
Polymarket has argued in court that it considers these wagers to be a type of financial contract between two parties, known as swaps, and not actual gambling bets. Therefore, in a federal lawsuit filed earlier this year, Polymarket said the appropriate regulatory authority for its transactions is the federal Commodity Futures Trading Commission — not the Michigan Gaming Control Board.
But Nessel's office doesn't buy that argument and in press releases has insisted that prediction market platforms such as Polymarket and its competitor, Kalshi, are doing illegal and unlicensed sports betting in Michigan.
The city of Detroit has backed Nessel's interpretation of the law.
City attorneys argued in a court brief last spring in support of Nessel against Polymarket that Polymarket, by being unlicensed and unregulated, diminishes how much the city receives in tax revenue from properly licensed sports betting apps such as FanDuel.
Critics, including one circuit court judge, also note how the minimum age to use Polymarket and Kalshi is 18, compared to the 21 minimum age in Michigan for licensed gambling apps and in-person casinos.
Polymarket did not respond on Wednesday, Sept. 16, to a message seeking comment for this story, including whether it had put up the water tower advertisement.
Nessel's office and the gaming control board didn't respond to repeated inquiries regarding what they consider the current legal status of Polymarket.
City to investigate
The water tower is on the property of 6400 Mount Elliott, which is home to Mount Elliott Crushing.
A man who answered the business's phone on Sept. 16 said the tower was indeed on their property and that he was unaware of any controversy involving Polymarket and the state attorney general.
Asked when the Polymarket signage went up, the man replied that he didn't put it up and then hung up the phone.
A spokesperson for the city of Detroit, John Roach, told the Free Press Sept. 16 that a permit is required for ads on water towers and there is not one on file for the tower in question and that the city's Buildings, Safety, Engineering and Environmental Department intends to send someone out to investigate the site for a possible correction order.
Polymarket does appear to be accepting business from Michigan residents.
A Free Press reporter, using a Detroit address and a PayPal account, was able to register for a Polymarket account and place a $9 wager on the outcome of the Sept. 16 Detroit Tigers and Toronto Blue Jays game.
Polymarket vs. Nessel
In March, Polymarket filed a lawsuit in federal court (in the Western District of Michigan) against Nessel's office and the Michigan Gaming Control Board, seeking an injunction against the possibility of Nessel ever attempting to apply gaming control laws to the company.
The lawsuit said Polymarket was facing an imminent threat, considering how Nessel's office earlier that month had sued its competitor, Kalshi, in an attempt to halt its operations.
In June, Judge Paul Maloney in that case denied Polymarket's injunction request.
In his opinion, the judge expressed skepticism of Polymarket's claim that its wagers were in fact "swaps" contracts as understood by financial regulations such as the Dodd-Frank Act that Congress passed following the 2008 financial crisis.
"The markets with which Congress was concerned were dominated by large financial institutions and did not involve individuals staking relatively small amounts of money on the outcome of a football game," Judge Maloney wrote.
Polymarket appealed the judge's decision to the Sixth Circuit Court of Appeals, where the case is pending.
Judge halts Kalshi
Nessel announced on Sept. 2 that she had succeeded in getting a preliminary injunction against Kalshi.
The injunction, issuedby a judge in Ingham County Circuit Court, prohibits Kalshi from any sports betting operations in Michigan and requires the company to maintain "geofencing" that blocks any computer or mobile device in the state from accessing the platform.
One of Kalshi's attorneys recently sent a letter to the Nessel's office, saying the company was concerned about how some states have sought to shut down Kalshi, but not its competitors such as Polymarket, Robinhood and Coinbase. The attorney wrote that he "was heartened to hear you state unambiguously that Michigan did not intend to enter into a non-enforcement agreement with any of Kalshi’s competitors."
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl
This article originally appeared on Detroit Free Press: City of Detroit to investigate water tower with Polymarket logo
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