Michigan postcard

It’s about time?

In December 2019, the Michigan legislature passed the Fantasy Contests Consumer Protection Act, which formally legalized fantasy sports in the state. Part of the Act, naturally, was to create the regulatory framework for Michigan fantasy contests. Now, nearly four years later, those rules have finally taken effect.

In a press release on Wednesday, Michigan Gaming Control Board Executive Director Henry Williams said, “Fantasy contests, like any other form of competitive gaming, thrive on rules and regulations. The Administrative Rules, which were reviewed by the Michigan Legislature, provide a level playing field for all fantasy contest operators and participants, and will help ensure that fairness, transparency, and integrity are upheld.”

The Act authorizes two types of fantasy sports licenses: one for the operator who actually offers the games and the other for the management company that operates the day-to-day contests. They could, of course, be one in the same.

The fact that the regulations were not enacted for four years is mildly interesting, though it more just illustrates the inefficiency of government (we’ll lay a little blame on the pandemic, too). The most interesting part, though, is what types of fantasy contests are NOT allowed.

Prop-bet contests prohibited

In Wednesday’s press release, the MGCB emphasized that “fantasy contest operators or licensed management companies may not offer any contests that have the effect of mimicking betting on sports, or that involve ‘prop bets’ or the effect of mimicking proposition selection.”

This restriction isn’t extremely important in Michigan, as sports betting is also legal, but in states where sports betting is illegal, fantasy contests that use prop bets or mimic sports betting have become more popular.

Other states have outlawed such contests, as well. New York did so earlier this month and Florida sent cease-and-desist letters to three fantasy operators – Betr, PrizePicks, and Underdog Sports – similar types of offerings.

The Coalition for Fantasy Sports, which is comprised of PrizePicks, Underdog, and Sleeper, has argued that the prop-bet contests are games of skill and believes that the big boys, namely FanDuel and DraftKings, have pushed to have them banned in order to solidify their power in the industry.

In the meantime, Michigan’s regulations expressly allow fantasy contests based on an athletic event, defined as “a real-world professional, collegiate, or nationally recognized sports game, contest, or competition involving skills of the participating individual athletes and upon which the outcome of the game is directly dependent on the athletes’ performances.”

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