Michigan regulator opens online licensing applications to operate fantasy contests

The Michigan Gaming Control Board announced Monday the addition of fantasy contest operator license applications to its official website. The agency may now issue two types of licenses.

An operator license is needed to conduct or offer fantasy contests for play, and a management company licensee handles the day-to-day fantasy contest operations for an operator.

In an official statement released by the Board, MGCB executive director, Henry Williams, said: “Licensing is a key step in fulfilling the requirements established by Michigan’s Fantasy Contests Consumer Protection Act. I urge operators to file soon for licensing so current operators can continue to participate and new ones can join them once rules have been approved by the Michigan Legislature”. 

The initial operator’s license fee is $10,000 and the annual license renewal fee is $5,000. In its draft rules, the MGCB proposes a $5,000 management company initial licensing fee and a $5,000 annual renewal fee. The Board may assess the operators or companies investigative costs if they exceed the initial license or renewal fee. 

State law requires submission of commercially reasonable procedures and internal controls to protect the public and ensure integrity of contests, which the Board must approve. Key personnel also must be qualified by the MGCB. 

Fantasy contest licenses may be issued to operators and their management companies, including those currently offering fantasy contests in the state. Commercial casinos and federally recognized tribes operating Class III casinos do not require a license to conduct fantasy contests. However, they must meet all other requirements of the Fantasy Contest Consumer Protection Act and associated rules. 

Current operators in the state who met the definition of a fantasy contest operator in Michigan in 2018 are required by law to apply for a license by July 1, 2022, in order to continue offering these contests in Michigan.

The MGCB’s proposed fantasy contest draft rules are proceeding through the state’s administrative rulemaking process following a public comment period that concluded with a public hearing in January 2022. The rules were submitted April 27 to the Michigan Legislature for review.  

Michigan taxes monthly fantasy contest adjusted revenues at 8.4%. The taxes are paid into the Fantasy Contest Fund, which provides the MGCB its costs of regulating and enforcing fantasy contests. The State School Aid Fund receives the money remaining after the MGCB’s expenditures.