The Michigan gambling regulator continues to work on the parameters about the use of official league data to grade in-game sports wagers, an issue that has largely been settled commercially in other states.
A planned revision to the state’s draft sports betting rules appears to loosen requirements for the leagues or their designated data provider.
Still, whether the board will require operators to use official league data for Tier 2 bets, or in-game wagers, is a multi-faceted question that will be answered only if leagues ask it.
And given that this kind of language emanated from the leagues themselves (the NBA, Major League Baseball, and the PGA Tour) as they lobbied in Michigan and elsewhere, they are almost certainly going to ask for it. Many major leagues have already signed data deals with the largest sportsbook operators directly or through a data provider, rendering the provision moot in some cases.
Check out Legal Sports Report for a refresher on official league data, including similar situations in Illinois and Tennessee.
Online gambling, still on the horizon in Michigan
While there are adjustments coming, nothing else major seems on the horizon, and board Executive Director Richard Kalm stayed consistent with a launch estimate around Thanksgiving.
U.S. leagues can request official data use
Operators will not initially be required to use official league data for sports betting.
However, US-based sports leagues can request their use, according to the Lawful Sports Betting Act, which was enacted in December.
The MGCB would then notify sports betting operators within five days of the request.
Then, operators will have 60 days to switch to league supplied data or a board-approved data source, unless the league cannot provide a feed of data on “commercially reasonable terms.”
What are commercially reasonable terms?
Of course, what’s reasonable is relative, though the board attempts to set that debate by setting factors it may consider.
- The availability of official league data from more than one source
- Market information about data from other leagues and/or in other states
- The quality and complexity of the process used for collecting data
- The extent the leagues or designees have made the data available to operators
- The league or data source obtaining a supplier license from the MGCB
Language change provides leagues with leniency
The rule-making process is ongoing to answer even more questions about the thorny issue. Draft rules were submitted to stakeholders in the spring, then to Lansing lawmakers in July.
The document has the words “generally” and “based on relevant and applicable standards” added to the passage below:
The board will revise this subdivision to clarify that official league data created, generated, produced, augmented, modified, supplied, packaged, or provided by an approved sports governing body or designee must be “generally complete, accurate, reliable, timely and available based on relevant and applicable standards.”
The word “generally” indicates the league or data source will be evaluated holistically, according to Mary Kay Bean, board spokesperson.
“Isolated incidents in which official league data failed or fails to meet these criteria will not necessarily be deemed grounds to deny or revoke a request for approval,” Bean wrote to PlayMichigan. “Instead, the MGCB intends to focus more on whether the sports governing body’s or designee’s official league data meets these criteria overall, ensuring there is not a pattern of providing official league data that fails to satisfy these conditions.”
The second added passage provides a framework for that evaluation.
“As an example, if there are industry standards for the accuracy rate of a specific type of tier 2 data, the standards will be used to evaluate whether that tier 2 data is provided accurately by a sports governing body or designee,” Bean wrote.
Other changes to online gambling draft rules
Stakeholders apparently went through the MGCB draft rules with a fine-toothed comb.
The board’s planned revision document contains 18 sections. Some will be rectified with deletions, others will be clarified, and still, more will not be changed.
The board also was still considering some revisions, such as a possible “overly broad” definition of an affiliate marketer.
Other changes could include:
- Allowing a casino employee to bet on an app partnered with their employer
- Clarity that operators only need to pay an application fee for its initial license application
- Updating language to reflect an upgraded version of a Gaming Laboratories International system
Next steps for online gambling launch
In a statement, Kalm said he hopes launch happens by late fall. Michigan will not launch online gambling until at least one brand partnered with a Detroit commercial casino and one with a tribal casino are licensed and ready, Kalm reminded.
The MGCB staff is managing the licensing process, a key cog in addition to the legislative process. The regulators will submit final draft rules soon to the Michigan Office for Administrative Hearings and Rules.
It seems as though the rules process is outpacing the licensing process, based on public comments from officials.
One reason for that could be the FBI fingerprinting snafu. Kalm told the board last month that the bureau was not accepting fingerprints from the MGCB for federal background checks at that time.
There was no update on the matter, Bean told PlayMichigan on Friday.
“The MGCB continues to work to resolve this matter,” she said. “At this point, it’s too early to say whether it will delay the licensing process.”