Lawmakers OK legislation that would regulate fantasy sports betting

Lansing — Legislation passed by the House on Thursday creates a regulatory framework for fantasy sports contests in the state of Michigan.

The legislation would add fantasy sports to the lists of games and contests exempted from the state’s prohibition on gambling and create the Fantasy Contests Consumer Protection Act to regulate the activity. The bills move to the Senate next, but it is not clear whether they will be taken up before the end of the session. 

The regulatory framework, which would fall under the Michigan Gaming Control Board, would both protect consumers and generate revenue for the state, said Rep. Brandt Iden, the bills’ sponsor.

“We know companies like FanDuel and DraftKings currently operate in this space, and these companies have come to us and said, like other states, Michigan should be regulated,” the Portage Republican said.

Licensed fantasy sports companies will have to pay a licensing fee of $50,000 and an annual renewal of $20,000, “which is fairly consistent with other states,” and will encourage “serious actors” to participate, Iden said. People younger than the age of 18 would be prohibited from participating in fantasy contests.

The act would not require a license for smaller fantasy sports contests if they were limited to no more than 15 participants and no more than $10,000 in total entry fees in a year.

The legislation is separate from traditional gambling and sports betting, Iden said, noting the nuances among the different activities.  

“It’s a very important the distinction here,” Iden said. “This is not sports betting. This is not gambling. This is a game of skill, not a game of chance, and that’s why we’ve set it up differently.”

In June, the House passed separate bills sponsored by Iden that would make it possible for gamblers in Michigan to play and bet on casino games online. The bills, which have yet to be taken up by the Senate, would allow casinos to obtain licenses to offer internet gaming and require an 8 percent tax on the activity.

Iden said Thursday he’s also working on comprehensive sports betting legislation to introduce in 2019.

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