Choose an exclusive state and then draft a roster of players born in that state. Use Baseball Reference (https://www.baseball-reference.com/bio/) for listing of players by birth state. Salary cap of $100M for 25 man roster. Yes to DH. Your choice of stadium. No AAA/injuries/clones/trades/waiver wire. 50 states eligible plus Puerto Rico are eligible however some states may not have enough players to complete a roster.
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