Many states in the U.S. neither expressly legalize nor ban Daily Fantasy Sports (DFS). However, the scenario in Michigan is different. In late 2019, Governor Gretchen Whitmer expanded gambling in Michigan, including the legalization of Daily Fantasy Sports. This expansion came after years of legislative struggles. The Michigan Gaming Control Board (MGCB) regulates DFS in Michigan. The licensing process is an extensive one, including third-party audits and background checks.
The Lawful Internet Gaming Act
Before Daily Fantasy Sports were legalized, they existed in a legal gray area, leading to disagreements about their legality. An effort was made before 2019 to legalize DFS. A bill was proposed that would amend the Michigan penal code to specify fantasy sports as a game of skill. This bill wasn’t successful. In 2017, lawmakers were considering online gambling legislation. A bill that would have authorized several forms of online gambling, including sports betting, was passed. It was then vetoed by Governor Rick Snyder in 2018.
It was only with Act 152 of 2019 being signed into law that Michigan online casinos and DFS became legal. Each casino operator in the state could offer internet gaming under two separate brands – one for casino-style games and another for interactive poker.
Michigan fantasy sports sites must conform to state laws about safety, security, and fairness. This means Michigan fans can play DFS contests online in a safe and fair environment.
What do DFS operators pay in taxes to the state?
The state taxes DFS operators pay is 8.4% of their adjusted gross revenues. This is the same tax rate for the retail and online sportsbooks in Michigan. In the first year when DFS was legal, the operators paid over $1.2 million in taxes to the state. There are currently four active fantasy contests in Michigan taxed by the state.
What are DFS contests?
Daily Fantasy Sports contests debuted in 2007, offering a fresh twist on traditional fantasy sports leagues. Instead of managing a team for an entire season, participants draft a lineup for just a single day of games. Winners are determined by their team’s performance on that specific day. This streamlined format gained immense popularity, especially among fans of the four major U.S. sports. DFS contests come in various structures and entry fee levels, accommodating a wide range of participants.
Pick ’em-style fantasy games
Those whose holiday plans this year are to visit Michigan need to be aware that pick-em-style fantasy contests aren’t legal in the state. These pick ’em-style games have become increasingly popular in recent times. A platform can present a range of players and assign them points. Users choose players and decide whether their points will be over or under the points the site assigns to them.
When joining pick ’em contests, players play against the house rather than other players. The blurring of the line between DFS and sports betting made regulators react, including those in Michigan. Now, fantasy contest operators are not allowed to offer games that have the effect of mimicking betting on sports or that involve prop bets.
How popular is DFS in Michigan?
Michigan is a large state with over 10 million residents, so it is a large market for DFS. It is also a large market for RVs as residents love going on adventures. Those who want to go for an RV can save costs by buying a used one. This helps them avoid the steep depreciation curve that comes with buying a new one.
Estimates suggest that there are over 37,000 active DFS players in the state. They pay nearly $70 million in contest entry fees on an annual basis. DFS sites are estimated to earn almost $6.7 million yearly from players in Michigan. Players enjoy the fact that they can play DFS in a secure and fair environment.
