New rules banning prop-style Daily Fantasy Sports (DFS) bets in Michigan took effect today, almost four years after the state passed its Fantasy Contests Consumer Protection Act (FCCPA).
The rules, the Michigan Gaming Control Board (MGCB) said in today’s release, provide the regulatory framework for licensing and operating fantasy sports in the state, ensuring Michigan’s DFS offerings are secure, responsible, and fair.
MGCB executive director Henry Williams noted the importance:
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.
Legal Michigan sportsbooks—particularly DraftKings—have considered such products a form of illegal competition since they first appeared. That’s because of the similarity between these pick’em products and conventional sports bets.
Michigan is following in the footsteps of Florida and New York in banning the products.
No to Prop Bets, Contests “Mimicking” Sports Betting
Michigan’s legislature passed the FCCPA, which authorizes fantasy sports’ operation, conduct, and offering in December 2019.
The MGCB proposed the new rules required under the Act and submitted them to Michigan’s Joint Committee on Administrative Rules. Those rules took effect today after being filed with the Office of the Great Seal, Bureau of Elections, within Michigan’s Department of State.
To offer fantasy sports in Michigan, the MGCB offers two licenses:
- An operator license (to conduct or provide fantasy contests)
- A management company licensee (to handle the day-to-day fantasy contest operations)
Under Michigan’s rules, a fantasy operator or management company can only offer contests based on an athletic event.
An event, as defined by the rules, is:
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.
However, the rules prohibit contests mimicking betting on sports, involving ‘prop bets’ or a mimicking of prop bets.
A prop bet is a wager on an aspect of a game beyond the actual outcome. For example, football prop bets include yards gained and touchdowns scored. Basketball player props include wagers on points, rebounds, assists, and three-pointers.
Along with the release of the rules, the MGCB will review current fantasy contest offerings to ensure compliance.
While commercial casinos and federally recognized tribes operating Class III casinos don’t need a DFS license, fantasy contests must meet all other rules and requirements.
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