There is concern that daily fantasy sports (DFS) operators might be encroaching on Michigan sports betting territory.
Recently, Michigan Gaming Control Board (MGCB) is proposed new regulations to ban contests that closely resemble sports bets. If adopted, the new rules would prohibit DFS operators from offering “proposition selection” products that mimic sports betting.
Moreover, the MGCB would ban “any fantasy contests that involve, result in or have the effect of mimicking betting on sports.”
Michigan not the only state considering new DFS rules
According to Bonus.com, Michigan and several other states have recently started looking into whether these bets fall under DFS (skill-based game) or sports betting. Recently, Kentucky, which is on the verge of launching sports betting, banned the games as of July 1. However, other states, like Pennsylvania, were sued and lost trying to ban the games.
Three DFS operators, Boom, PrizePicks and RealTime Fantasy Sports, offer single-player DFS pick ’em contests in Michigan. Another DFS operator, Underdog Fantasy, exited the state when regulators created DFS licensing requirements.
Other states looking at similar regulation changes include Ohio, Massachusetts, New York and Wyoming.
Fantasy operators insist games are legal
In an open letter to his site’s players, Underdog founder and co-CEO Jeremy Levine has insisted that its products are legal. Levine mentioned that state regulators in Arizona, Colorado and Indiana confirm his claims.
“When the Supreme Court later permitted states to legalize sports betting, DraftKings, FanDuel and their lobbyists went to work,” he wrote.
“But this time, they wrote laws designed to make it hard for innovators to break into the brand-new sports betting industry. The strategy worked and they had a near instant monopoly, capturing nearly 80% of the US sports betting market.”
Furthermore, Levine also said that government officials in Alabama and North Carolina, which is launching online sports betting next year, have said that pick ’em is not sports betting.
Levine concluded by saying:
“But Underdog and other companies innovating in fantasy sports and sports betting threaten their monopoly. They’ve seen our company, and others, produce superior products, more exciting user experiences, and begin to challenge them for sports fans’ attention – and they’re scared that we will challenge their market positions. We’re already bigger than they are in fantasy. Frankly, they should be scared.”