Draft regulations to govern Michigan sports betting provide sportsbooks a clear pathway to challenge an official league data mandate.
Michigan’s sports betting law requires the use of official league data for Tier 2, or in-play wagers. The first iteration of MI sports betting draft rules, though, provides a pathway for unhappy operators.
Official league data in Michigan sports betting
As a default, the rules specify that a sports betting operator or internet sports betting platform provider may use any approved data source to determine Tier 2 sports bets.
The official league data requirement kicks in if a sports governing body headquartered in the US notifies the board in writing of its desired use. Official league data providers must first acquire a supplier license.
Operators have 60 days to change over to official league data once notified of the request.
If official league data is not available for a particular type of in-play wager, operators may use any approved data source to grade that bet.
Challenging for commercial reasonableness
If a sports betting operator petitions the board that the terms under which official league data is or will be provided are not commercially reasonable, sports betting operators may use any approved data source to determine the results of tier 2 wagers in that sport.
Board decisions could take up to 120 days.
Factors determining whether official league data is offered on commercially reasonable terms include:
- Whether the data is available from more than one authorized source under materially different terms.
- Market information regarding the purchase of data used to settle Tier 2 sports bets in Michigan or any other jurisdiction.
- Characteristics of official league data and alternate data sources regarding the nature, quantity, quality, integrity, completeness, accuracy, reliability, availability, and timeliness of the data.
- The extent to which sports governing bodies or their designees have made data used to settle Tier 2 bets available.
- The availability and cost of comparable data from other sources.
- Whether any terms of the contract or offer sheet are uncompetitive in nature, economically unfeasible, or place an undue burden on the operator.
Requirements to launch MI sports betting
The Michigan sports betting draft rules and regulations establish procedures for how operators and their suppliers can gain approvals.
Before offering online sports betting, operators will need to do the following:
- Meet technical specifications for geofencing.
- Receive approval on internet sports betting platform.
- Establish internal controls on event integrity monitoring.
- Set house rules that include types of wagers offered, minimum and maximum wagers accepted, methods of funding a wager, etc.
- Get board approval on internal control standards and requirements. A written system of internal controls must include a detailed description of the administrative and accounting procedures designed to satisfy the requirements of the rules.
Timetable for mobile sports betting
Retail sports betting began in Michigan on March 11. Less than a week later, casinos in the state closed as a result of the coronavirus pandemic.
The Michigan Gaming Control Board (MGCB) advised that online sports betting would take much longer. Gov. Gretchen Whitmer instructed that emergency rules not be used to expedite the process.
The MGCB notified operators that the supplier licensing process will be beginning shortly. The first applications will be available by the middle of May.
However, that doesn’t mean the timetable has moved up for mobile sports betting in Michigan.
Mary Kay Bean, spokesperson for the MGCB, tells LSR that the board won’t authorize online sports wagering until the rules are finalized.
She said the state is on pace to meet its timeline of completing rules by early 2021. It could happen earlier depending on the timeframe for legislative review.
