Daily Fantasy Sports Illegal in Michigan, Says Regulator

Posted on: September 5, 2015, 12:26h. 

Last updated on: September 5, 2015, 12:26h.

Michigan State Senator Curtis Hertel’s DFS bill SB 459
State Senator Curtis Hertel (D-District 23), whose SB 459 bill seeks to have fantasy sports legally declared a game of skill in Michigan. (Image: linkedin.com)

Daily Fantasy Sports is “illegal under current Michigan law,” according to Rick Kalm, executive director of Michigan Gaming Control Board (MGCB), the state gambling regulator.

The opinion, offered to Gambling Compliance this week, suggests that those offering and participating in DFS for real money are currently violating the law, despite a new push to legalize a practice which is enjoyed by a vast amount of Michiganders.

“Over the next few weeks an estimated 1 million citizens, myself included, will be gathering to draft their fantasy football teams,” declared State Senator Curtis Hertel (D-District 23), as he introduced a bill last week that seeks to have DFS declared a legal game of skill.

“Unfortunately Michigan law currently has no legal protection for citizens participating in fantasy sports. That is why today I have introduced Senate Bill 459, a bill which will amend the Michigan penal code to specify fantasy sports as a game of skill, legalizing fantasy leagues in Michigan,” he added.

Kansas Parallel 

The regulator’s comments, however, have caused enough consternation at the Fantasy Sports Trade Association that it immediately hired a lobbyist to fight its cause in the state.

But Michigan DFS fans shouldn’t run for the hills just yet. The Michigan attorney general’s office has so far made no attempt to target DFS in the state, and meanwhile, the current state of play in Michigan closely mirrors that of Kansas, which has since fully legalized the game.

Last summer the Kansas Racing and Gaming Commission (KRGC) was asked to provide a definitive ruling on the legality of fantasy sports. KRGC duly judged that fantasy sports leagues were predominantly luck-based, and therefore illegal.

“If a fantasy sports league has a buy-in (no matter what it is called) … and gives a prize, then all three elements of an illegal lottery are satisfied,” concluded KRGC.

UIGEA Exemption

This stance has since been successfully challenged, allowing for the passage of HB 2155, which legalized the game in May.

“Our conclusion is bolstered by the fact that the UIGEA also specifically excludes fantasy sports leagues from the federal definition of betting,” said Kansas Attorney General Derek Schmidt. “Under federal law, Congress has determined that fantasy sports leagues are games of skill.”

Fantasy sports is exempt from the Unlawful Internet Gaming Enforcement Act 2006 because powerful lobbyists for the sports leagues were able to convince the government that it was “not gambling,” although, of course, DFS as we know it today did not exist in 2006.

Thus, UIGEA leaves it up to individual states to decide whether the games are legal. Currently only five states, Arizona, Louisiana, Montana and Washington, completely deny their citizens access to DFS.