Michigan’s New Betting Laws End Prop-Style Bets on DFS Apps

by Anne B. Robinson

Michigan regulators have introduced a new law to put an end to prop-style bets on daily fantasy sports apps. The new rules are effective immediately and prohibit prop bets and other betting mimicry on all fantasy sports apps in the state.

After New York recently enacted a similar law, Michigan is now the second state to ban prop bets from daily fantasy sports apps. The new Fantasy Sports Contests Consumer Protection Act, crafted by the Michigan Gaming Control Board, marks a significant shift in the state’s fantasy sports market.

Affected daily fantasy sports apps include PrizePicks and Underdog, both of which have prop-style bets and other markets bookmakers offer.

Loopholes In the Betting Regulations

Betting has exploded in the country since the US Supreme Court abolished the Professional and Amateur Sports Protection Act, PASPA, in 2018. The industry now has dozens of licensed operators, generating billions of dollars in gambling revenue.

Michigan is one of the 30 states in the US with a legal sports betting framework. The state allows operators like BetMGM, FanDuel, and DraftKings to offer betting products and casino games to punters of legal age. Popular betting markets in legal sportsbooks include the money line, spread, total, futures, and props.

Punters can place bets on real-life sports events using betting apps. The market also features daily fantasy sports apps that aren’t technically recognized by the state as betting apps. However, DFS apps have exploited loopholes in the regulations, offering sports wagers to punters without being seen as betting apps.

According to some people, DFS apps offering prop bets to their customers pose a threat to competitors and regulatory integrity. Since such platforms don’t have the license to provide sports bets, they shouldn’t feature props and pick’em bets, which are exclusive to licensed betting operators.

Addressing Regulatory Hypocrisy

With the World Cup 2026 coming to the US and Michigan tasked with developing turfs for the 16 host states, now seems like the ideal time to address regulatory contentions. Michigan regulators’ new rules will put an end to one of the “regulatory hypocrisies” plaguing the betting industry.

In states like Florida, where betting on sports is illegal, fantasy sports apps can still find loopholes that allow them to feature as much betting action as they want. DFS apps like Sleeper feature parlay bets where punters string together two or more prop-style bets related to player performance.

Licensed operators see this as a point of regulatory hypocrisy, a position that led Florida’s regulators to send cease and desist letters to three DFS platforms offering prop-style bets. If betting on sports is illegal, prop bets shouldn’t be allowed on daily fantasy sports apps.

Michigan’s new DFS regulations target fantasy sports operators offering betting products through existing loopholes. Like New York, the state has banned all forms of mimicry to real sports markets to create a clear distinction between fantasy sports and conventional betting.

According to a statement from MGCB’s executive director Henry Williams, the new administrative rules provide a “level playing field” for all fantasy contest operators and participants. The rules were reviewed by the Michigan Legislature and will ensure the upholding of fairness, transparency, and integrity.

The rule is simple: fantasy contest operators and licensed management companies are banned from offering contests that mimic betting on sports, proposition selection, or prop bets.

Fantasy Operators Object New Rules

Michigan became the latest state to stamp out contests they consider too much like sports betting, among them prop-style over/under bets. The issue is on odds on specific events, such as whether player X will get over/under X number of strikeouts or hits in an MLB game. According to the detractors, this fantasy category leans too much toward betting.

However, fantasy operators maintain they’re well within the regulations when they feature over/under bets in their fantasy offering. DFS contests must require skill, and the outcome of the bet is predicated on two or more athletes from different teams.

The outcome must also be based on the statistics and performances of those athletes in their teams. Fantasy operators insist their offering satisfies all the conditions.

A coalition of daily fantasy sports operators has vowed to fight the new rules. With them is the support of “thousands” of Michigan residents who phoned and emailed state lawmakers prior to the ban.

According to the coalition, which features PrizePicks, Underdog Fantasy, and Sleeper as members, the new rules could limit some popular fantasy sports games in the state. The coalition also reiterated the statement made by Senator Jim Runestad, who criticized the lack of action from the legislative committee.

According to the Republican Senator, the lawmakers “ignored the voices of Michiganders and violated the original bill’s intent.” The senator also called for MGCB to restore fantasy sports games that the new ban has just taken away from Michigan residents.

The crackdown on DFS pick’em games continues despite opposition from fantasy operators. States like New York, Ohio, and Florida have already ended the prop-style bets. Michigan now joins them, which means other states could soon follow suit.

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