Is daily fantasy sports illegal in Michigan?

The legality (or not) of daily fantasy sports seems to be creating a widening debate on the booming vertical and the differences between the daily genre and the traditional seasonal format which successfully achieved carve-outs in federal law (see previous reports).

The latest influential personality to express an opinion is Rick Kalm, the executive director of the Michigan Gaming Control Board, who said this week that in his view real-money DFS operations are illegal under state gambling laws.

Whilst such an opinion is not law and is perhaps debatable, there can be no denying that it is relevant in the context of the Unlawful Internet Gambling Enforcement Act, which gives individual states the authority to decide on the issue.

If Michigan legislators and the state Attorney General support Kalm’s view, the state could become the sixth – alongside Washington, Iowa, Louisiana, Arizona and Montana – state to declare DFS illegal and unsuitable for their residents.

On the other hand, state legislators have the power to introduce legislation which would permit DFS in Michigan.

So far the market leaders – DraftKings and FanDuel – have played ball with dissenting states, cooperating in blocking their residents from playing.

There is a corollary to the Michigan debate, as a similar situation existed earlier this year in the state of Kansas, where the regulator gave an opinion against DFS, but the AG differed, arguing that DFS was a skill game and therefore fell outside the definition of gambling.

Legislators introduced the necessary legislation, which was signed into state law, and DFS is now legal there.