MGCB Introduces New Rules to Discontinue Prop Bet Fantasy Contests in Michigan

Sometime in August, fantasy sports games operators in Michigan came under fire from regulators and sports betting companies on allegations of offering illegal prop bets.

Sportsbooks like DraftKings and FanDuel Sportsbook MI led accusations against PrizePicks for what they claimed to be an attempt at cutting into sports betting margin. The MGCB responded with an alteration to its rules which would prevent daily fantasy operators from proposition selection.

Recently, the new MGCB rules were approved, effectively bringing prop bets and pick’em style fantasy games to an end in Michigan. The new legislation is set to begin effect in the state sometime later in Michigan.

The Michigan Gaming Control Board, in August, proposed the first set of rules to ban pick’em style DFS operations in the state. According to those draft alterations, DFS operators would be precluded from “proposition selection or fantasy contests that have the effect of mimicking proposition selection.” Barely two months after, the rules will not take effect, banning prop bets and other illegal operations of daily fantasy sports sites.

According to The Coalition for Fantasy Sports, a group representing PrizePicks, Sleeper and Underdog Fantasy, the legislation is set to limit the activities of fantasy sports providers. The rules proposed by the Michigan Gaming Control Board were accepted by the Joint Committee on Administrative Rules due to the latter’s inaction. The JCAR did not meet to deliberate on the rules or take any form of action until the 15-day window allotted expired.

Michigan fantasy sports operators suggest that the committee’s inaction did not represent the interest of Michiganders.

“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,” the Coalition for Fantasy Sports stated in a public release.

The new rules have now been forwarded to the Michigan Secretary of State for final approval.

Michigan joined New York and Florida as the latest states to limit DFS operations. Since the JCAR’s approval, the Michigan Gaming Control Board has revealed that the legislation will kick off in October. The Board will also review the status of existing fantasy sports license holders to ensure the new rules are adhered to.

“Fantasy contests, like any other form of competitive gaming, thrive on rules and regulations,” MGCB Executive Director Henry Williams said. “The Administrative Rules, which were reviewed by the Michigan Legislature, provide a level playing field for all fantasy contest operators and participants, and will help ensure that fairness, transparency, and integrity are upheld.”

However, DFS sites are not taking this development lightly. Underdog Fantasy, a notable DFS operator, left Michigan back in 2022 due to a change in legislation which affected its legally permissible activities. Many have now suggested that PrizePicks, the leading DFS site in the Great Lakes State may be forced to exit Michigan.

PrizePicks was known for over/under betting options, which DraftKings Sportsbook MI and FanDuel Sportsbook MI considered prop bets. The brand is the largest revenue generator among daily fantasy sports providers in the state with $8.5 million recorded since the start of 2023. It also generates over $700K in tax revenue and accounts for 63.9% of the total market share.