Is Daily Fantasy Sports Legal in Michigan?

The straight up answer: Technically, no, but hold up (x10) like Kanye says to do.

Next time you watch or listen to any television or radio football broadcast, count how many advertisements you see or hear from daily fantasy sports (DFS) companies like DraftKings or FanDuel. Think about how many people choose to participate in those games each day. Do you think they question the legality of those games, nationwide or specifically in your state of residence? I doubt it. Think about how young these companies are. Do you think the DraftKings and FanDuels of the world would subject themselves to business in a state where DFS is illegal? That is easily debatable, but hey, I'm here to highlight what the average person may not observe.

Being picky with words when drafting a legislative bill is warranted, and Michigan's law regarding fantasy sports is a prime example of why. One legislator is trying to modify it because apparently the Michigan Gaming Control Board (MGCB) has a thought-provoking stance on the issue. The MGCB executive director considers playing DFS to be "illegal under current Michigan law." Sen. Curtis Hertel is looking to modify current Michigan law to protect citizens' right to play.

The Introduced Bill to Establish Law in Michigan

Sen. Hertel's bill seeks to make fantasy sports a "game of skill" consistent with federal law 31 U.S.C. 5362(1)(e)(ix), excluding fantasy sports from Michigan gaming law. It is a deceivingly simple amendment that was prudently crafted to try including what we know today to be fantasy sports and what we could consider in the future as fantasy sports. The bill as introduced attempts to look prospectively because the industry is evolving rapidly. By not addressing DFS expressly, the bill is a catch-all for fantasy sports.

Marc Edelman, a legal expert on fantasy sports, claims that "Michigan is not among the highest risk states such as Arizona, Louisiana or Tennessee, but without a formal study showing the ratio of skill to chance in daily fantasy sports, it is really a tough legal issue ... the legality probably varies by game format, with some formats on the right side of the line and others on the wrong side."

Many states have considered and reviewed fantasy sports legislation in 2015, but only Kansas has successfully signed a bill into law that sought to legalize daily fantasy sports. Click here for an easy-to-read report on those states, the bill synopsis, and the bill status. It is possible that the Michigan legislature will follow Kansas' footsteps since it has a comparable disposition, but there is an obvious trend to consider to stop Michigan citizens from getting too excited.


The Lurking Distinction Between Season-Long FS & DFS

Federal law makes season-long fantasy sports legal because it views it as a game of skill rather than a game of chance. Because of federal preemption, Michigan law is required to make season-long fantasy sports legal, too. On the contrary, federal law is silent on the specific legality of DFS. So, the states have no clear-cut rule to follow with respect to this particular fantasy sports niche, and the legal risks are shared by the companies themselves and their consumers alike from state to state. For example, DraftKings and almost every other DFS company welcomes players from every state except five - Washington, Montana, Iowa, Arizona, and Louisiana because their laws are notoriously adverse to the game.

According to DraftKings' CEO Jason Robins, "[A]nyone who has taken the time to understand the law as it relates to DraftKings' offerings, and anyone who has seen the data ... on the skillfulness of the game, it's really, honestly not a debate. It's clearly legal. And we have a team of great lawyers who watch everything we do."

From my perspective, this seems like a very naive statement. Sure, he has to defend his company, but to boldly brush off legal uncertainties in a time where placing money on sports is being scrutinized to a greater extent is not cool. Look at the MGCB's remark, the companies clearly avoiding certain state jurisdictions, and the legislative moves that lawmakers in other states are attempting to make, and Mr. Robin's loud response loses credibility.

If You Do Play DFS In Michigan...

... you can technically continue to do so with caution. In the meantime, we will wait to see if the introduced bill goes through and passes. If that happens, you are in the clear because of the law's intention to cover fantasy sports more broadly as a legal game of skill.

If that does not happen, then we will see if the attorney general decides to press charges against DFS companies who look to gain business in Michigan, subjecting themselves to current Michigan law. Alternatively, the attorney general could prosecute DFS players, for they would be breaking Michigan law, and the MGCB opinion would be a strong argument for him to use. Until the attorney general takes action against these companies - or worse yet, players - to create judge-made law on the matter giving us one of two answers given Sen. Hertel's law fails, the issue will remain murky.