Michigan House Approves of Legalized Fantasy Sports Gambling

Michigan’s House voted on Thursday to legalize fantasy sports gambling under a new package of bills. Both of these bills, sponsored by Republican Rep. Brandt Iden, legalize the activity and propose a statutory framework that will oversee it. He said that Indiana has similar fees for the fantasy gambling business and he’s excited over the possibilities of these bills:

“I don’t believe that excludes anybody from the marketplace. We want serious actors who can come in and operate these games and make sure they are benefitting players in the state of Michigan. These fees are consistent with other states and I’m happy with where we’re at.”

An attorney who represents Small Business of Fantasy Sports Trade Association, Steve Brubaker, says that the registration fee is too expensive for smaller businesses. The state wants $50,000 and Brubaker thinks the fee would take too large of a chunk out of the profit margin from smaller fantasy sports businesses. He would like the state to follow Colorado’s example, which uses a tiered registration fee.

“The companies that will pay that price to operate in Michigan are two: Draft Kings and Fan Duel.”

Impact of Michigan’s Fantasy Sports Betting on Canada

Even though there is a border between Canada and Michigan, players interested in playing fantasy sports could very well make the drive to go and test their luck. Furthermore, Michigan is also working to legalize sports gambling, which would give Canadians even more incentive to make the drive. Canada is at a disadvantage because the country doesn’t allow bettors to bet on a single event; the law says that wagering on two or more sports events is legal.

History of Fantasy Sports

Fantasy sport games are a type of online game where game participants build virtual teams of real players of a pro sport, and then the teams compete based on the stats of those players in real games. Their performances are converted into points and then each fantasy team’s manager collects those points according to the roster.

Fantasy sports have been around since the middle of the 1900s. In the 1950s, Bill Winkenbach came up with the idea of fantasy golf. In 1962, he created the first recorded fantasy football league and called it the Greater Oakland Professional Pigskin Prognosticators League, which had eight teams. The first fantasy baseball league started in 1960 in Boston.

With the advent of the Internet and personal computers, fantasy sports became easier to set up and manage. The compilation of statistics was made much easier and in 1991, two men from Dallas made the first Fantasy Sports Application, named AutoStat. Unfortunately, the program didn’t have much luck with the general public and they closed it down after only four years.

In October 1995, Molson Breweries created a fantasy hockey website that allowed visitors to register accounts and participate in hockey leagues. There were nine teams and visitors would become the general manager for one of the teams. The GM would create a team from a pool, and could trade with other teams.

After Molson’s success, a number of other companies came out with their own online fantasy sports games. As of 1999 in the U.S., 29.6 million people played fantasy games; however, that number was later reduced since it was revealed that the survey included people who play NCAA bracket pools.

In 2003, Fantasy Sports Trade Association reported that 15 million people played fantasy football. Players spent an average of $150 a year, which made it a $1.5 billion industry. In 2013, Forbes reported that 32 million Americans spend about $15 billion a year on fantasy football.

The Montana Lottery started to offer legal fantasy sports betting for the first time in the fall of 2008. Montana was one of only four states at the time with legalized sports betting.

Legalized Fantasy Sports Will Lead to Sports Betting

The legalization of fantasy sports in Michigan will be the precursor to legalized sports betting. Once this is finalized, DraftKings and FanDuel can set up shop for fantasy sports in Michigan and wait for the state to approve the legalization of sports betting.

Both companies have already begun to infiltrate the sports betting industry in other states. By the time Michigan gets on board with legalized sports betting, I’m sure DK and FD will have found some willing partners to team up with for successful sports betting ventures.

Rick Rockwell

As a longtime freelance writer, avid sports fan, former athlete, and experienced sports bettor, Rick Rockwell has risen up the ranks at GamblingSites.org to become the self-professed "King of the Blog" in his first year with the site.

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