Michigan sports betting regulators are banning pick ’em daily fantasy sports contests, according to a group representing PrizePicks, Underdog Fantasy and Sleeper.
The Coalition for Fantasy Sports, on Wednesday, announced that DFS companies offering over/under props on individual players against the house will be forced out of Michigan. The announcement came less than 24 hours after New York instituted a similar ban, and two weeks after pick ’em operators were ordered to leave Florida.
Michigan rules automatically in effect
According to the Coalition, the Michigan Gaming Control Board‘s proposed rules banning the games automatically cleared legislative approval because lawmakers declined to take it up.
“Thousands of Michiganders reached out to lawmakers asking that the MGCB rules be rejected, submitting over 2,600 emails and making over 700 phone calls. Despite the public appeal, JCAR members held no meeting and took no action before their 15-day window expired yesterday, thereby approving the Board’s rules by default.”Coalition for fantasy sports press release
The rules go next to the Michigan Secretary of State, who is expected to approve them.
“We will continue to work with regulators and policymakers to provide the innovative fantasy sports products customers want and love,” the Coalition said in a statement.
Who does this impact?
The rules likely force PrizePicks, one of the top DFS operators, to leave the state.
PrizePicks leads all fantasy operators in app downloads through the first four weeks of the NFL season, JMP Securities said. Sleeper and Underdog, the next two most downloaded, do not operate in Michigan.
Other DFS apps that do not offer pick ’em like DraftKings and FanDuel are not impacted by the ban. Pick ’em companies have largely blamed them for the recent regulatory crackdown on their products.
Pick ’em operators defend the contests as legal under the federal UIGEA skill-based carveout for fantasy sports. Regulators in states, like Ohio and Maryland, have classified those contests as de facto sports betting.
Michigan tailors fantasy rules after sports betting
This is not the first time Michigan regulators have cracked down on various versions of DFS.
Last year, Underdog voluntarily left the state after Michigan added licensing requirements for DFS. Boom Fantasy, PrizePicks and RealTime Fantasy Sports were the only pick ‘em operators that acquired a license and stayed.
That made Michigan one of the only states to apply the same tax rate to both fantasy and sports betting.
Michigan language similar to other bans
After Michigan launched legal sports betting in 2021 the MGCB considered a similar pick ’em ban but declined to go forward after pushback from some lawmakers. The mechanism that codifies the current ban differs from that proposal, in that it required legislative approval.
Language in the regulation to prohibit “proposition selection or fantasy contests that have the effect of mimicking proposition selection,” is nearly identical to the bans adopted by New York and Ohio.