Clarity On Michigan's Online Gambling Chances Should Emerge From Wednesday's Hearing

The Answers To These 4 Questions Will Provide A Clearer View Of Online Gambling’s Chances In Michigan

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On Wednesday, the Michigan Regulatory Reform Committee, a bicameral committee made up of house and senate members, will hold a hearing to discuss State Senator Mike Kowall’s online gambling expansion bill, SB 889.

SB 889, the state’s first online gambling expansion bill, was first introduced on April 15, 2016. Wednesday’s hearing marks the first time the legislature will discuss the issue.

The bill currently has a total of five sponsors.

Because the Michigan online gaming bill snuck up on us, and with little time left on the legislative calendar its moving relatively fast, this will be our first opportunity to see where the state stands on the issue.

When the hearing comes to a close we’ll hopefully have answers to the following questions.

Who’s for it and who’s against it?

This may come as a surprise to many people, but Michigan has a large, diverse gaming industry.

First, there are three commercial casino operators in the Detroit area:

  1. MGM Grand Detroit
  2. MotorCity Casino
  3. Greektown Casino

There are also roughly two dozen tribal casinos in the state.

The online gaming bill up for consideration limits online gaming licenses to eight, which means some of these casino operators are going to be sitting on the sidelines and may oppose the bill. One possible solution would be to allow some of the casinos to act as a skin for one of the state’s eight licensed operators.

It will be interesting to see who supports the bill (you can pencil in MGM as a supporter now), and where any opposition might come from. If the casinos are unanimously behind it, the bill has a fighting chance of advancing.

How far along is the Michigan Legislature?

One of the more overlooked, and frustrating aspects of online gaming is the seemingly simple but actually difficult matter of getting legislators up to speed on what is an extremely nuanced and altogether fluid industry.

If you’ve followed the slow slog of online gaming legalization efforts across the country, you’re already aware that many of these first-time hearings tend to be extremely basic and informational in nature.

Generally, there are one or two lawmakers pushing for the bill, and they host these hearings to get the other lawmakers caught up on online gambling – why the fears and concerns are unjustified, what it can do for the state in terms of revenue, consumer protections, bolstering brick and mortar casinos, and so forth.

On the other hand, if there has been a lot of behind the scenes lobbying for the bill, the Regulatory Reform Committee may prove to be far more versed than we’ve seen in some other states over the years.

How knowledgeable the legislators are when it comes to online gaming issues will be a good bellwether for the bill’s chances. If committee members start asking simplistic questions, don’t expect much to happen this year.

What are the hurdles?

It would be great if everyone at the hearing was in complete agreement on all the key issues,and the bill simply sailed through the legislature all the way to Governor Rick Snyder’s desk. It would also be great if I turned around right now and found a cardboard box full of $100 bills. Neither are likely to happen.

There will certainly be points of contention, but precisely what those will be are unclear at this early stage.

Probable issues include:

  • Licensing fees and/or taxation rates.
  • The number of licenses and/or who is suitable for licensure.
  • Can the state limit tribes’ ability to offer a legal gambling product?
  • Do any land-based operators or legislators harbor cannibalization anxieties?
  • Will any brick and mortar operators or legislators raise problem gambling or technology concerns?

There is also a serious but unrelated issue that could slow down the bill’s progress.

That issue is the still ongoing and utterly appalling water crisis in Flint, Michigan. With the city’s water supply poisoned by incomprehensible amounts of lead, the idea that the legislature would go to work on a bill to expand gambling in the state might result in some blowback, particularly from CSIG and anti-gambling types who will show up with cherry-picked data about gambling’s impact on the poor.

Which issues are raised – and how fractious these are – is an important theme to pay attention to.

Can Michigan pass an online gaming bill this year?

This is the million dollar question: Is there any possible way for Michigan to pass an online gambling bill this year?

The short answer is that we simply don’t know at this point.

When all is said and done and we pan back for the 30,000 foot view of the hearing, the answers to the three questions listed above should give us a good reading of online gambling’s chances not only in 2016, but looking ahead to 2017 and beyond.

- 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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