Michigan Online Gambling BIll

Michigan Jumps Into Online Gambling Debate With Bill To Regulate Internet Poker And Casino Games

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A bill that would legalize and regulate online gambling was introduced into the Michigan State Senate by State Senator Mike Kowall (R-White Lake) on Friday.

Dubbed “The Lawful Internet Gaming Act,” SB 889 was referred to the Committee on Regulatory Reform.

Kowall, who represents Michigan 15th District, was first elected to the state senate in 2010. Kowall is the vice chair of the Commerce and Oversight Committees, and a member of the Government Operations, Joint Committee on Administrative Rules, and the Regulatory Reform committees.

Kowall’s office had not responded to requests for comment as of this writing.

Full text of the bill is available here.

What the bill seeks to do

The bill states:

“the Internet has become an integral part of everyday life for a significant number of residents of this state, not only in regard to their professional lives, but also in regard to personal business and communication. Internet wagering on games of chance and games of skill is a core form of entertainment for millions of individuals worldwide. In multiple jurisdictions across the world, Internet gaming is legal, regulated, and taxed, generating billions of dollars in revenue for  governments.”

The bill also cites the need to protect consumers and create new revenue streams and jobs as the driving forces for the legislation:

“In order to protect residents of this state who wager on games of chance and skill through the Internet and to capture revenues and create jobs generated from Internet gaming, it is in the best interest of this state and its citizens to regulate this activity by authorizing and establishing a secure, responsible, fair, and legal system of Internet gaming that complies with the United States Department of Justice’s September 2011 opinion concerning 18 USC 1084.”

The specifics of SB 889

Full bill text here. Some quick highlights:

  • Restricts access to players 21 and older.
  • Authorizes poker and casino games.
  • Michigan-based casinos and tribal casinos can apply for a license, and no more than eight licenses will be granted.
  • There is a $5 million licensing fee – including an upfront, nonrefundable $100,000 fee. The $5 million fee is an advance payment against future taxes owed.
  • There is a 10% tax on gross gaming revenue.

Also of note: the bill doesn’t appear to expressly restrict access to online gaming sites based on a player’s location, opening the door for international and interstate compacting:

“Notwithstanding anything else in this act, a wager may be accepted from an individual who is not physically present in this state if the division determines that the wager is not inconsistent with federal law or the law of the jurisdiction, including any foreign nation, in which the individual is located or that the wagering is conducted under a multijurisdictional agreement to which this state is a party that is not inconsistent with federal law.”

Michigan’s successful online lottery

The Michigan legislature is already somewhat familiar with the nuances of online gaming, as the Michigan Lottery was one of the first states to expand into online sales, launching their online lottery site in January of 2015.

The state’s experience on this front, and the success of online lottery sales in the state, could help move the online gambling along in the legislature.

Also of note, Michigan is one of many states exploring DFS legalization.

Image credit: Susan Montgomery / Shutterstock.com

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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