Michigan online gambling could start later this year, if all goes well

Michigan Online Casino And Sports Betting Will Get One Step Closer With Sept. 23 Hearing

In a few weeks, Michigan will take the next major step towards its online gambling launch. The Michigan Gaming Control Board (MGCB) has scheduled a public consultation on September 23 to solicit feedback on the latest draft of its rules for operators. These cover online poker, casino and sports betting.

The hearing will be held online due to COVID-19, using Microsoft Teams. It will take place at 1 p.m. and last for about three hours. Anyone can participate and can choose to access the hearing either through their computer or by calling in on their phone.

The purpose of the rules is to protect the public by establishing clear guidelines for the following:

  • Responsible gaming measures
  • Integrity monitoring
  • Oversight capabilities for the MGCB
  • Protections for authorized users
  • Licensing standards and procedures
  • Technical and security standards
  • Internal controls for operators and third-party suppliers

The licensing process is already underway as well. However, the rules have to be finalized before any licenses can actually be issued. The best-case scenario would have this taking about six weeks following the public hearing.

It’s hard to hurry through red tape

Michigan is struggling to get iGaming off the ground as quickly as possible. Originally, the target date was somewhere in the first half of 2021. However, the shutdown of land-based casinos due to COVID-19 highlighted the importance of having online gambling as a backup revenue stream. Since the virus replicates better in cool weather, there’s a risk that the fall could force a second round of closures, and the state would like to be prepared for that eventuality.

However, it’s normal that it takes a year or more between an online gaming bill passing and the launch of the first sites in the state. There are a lot of bureaucratic tasks that need to be taken care of. Most of that paperwork also has to pass through the hands of multiple agencies and committees.

New Jersey managed to do it in just nine months, but West Virginia took sixteen and Pennsylvania went nearly two years from legalization to launch. Having passed its bill in December last year, Michigan would be doing better than average even with an early 2021 launch, but has been trying to push things up to October instead.

October, however, is looking less and less likely as time passes. The best-case timeline issued by the MGCB allowed 30 days between the publication of the draft rules and the scheduling of the public hearing, then a further 18 days before the hearing itself. In reality, it took 34 to schedule the hearing, for a date that was 27 days from the announcement. This phase of the process, then, has been running about 25% longer than the best case. Extrapolating from that would make a launch in November or December more likely.

What comes after the hearing?

The good news is that the hearing itself probably won’t cause any delays of its own. The general public shouldn’t find much to object to in the rules, which for the most part resemble those that are working well in other states.

There are some restrictions that might be slightly irksome to operators. For instance, some stipulations about progressive slots jackpots seem designed to prevent them from growing too large. The reason for these is presumably to avoid hurting lottery sales. However, the operators have already had their chance to provide input and are now as keen to get things off the ground in the state for the new Michigan online casinos and Michigan online sportsbooks.

Assuming there are no objections that would force a significant rewriting, the next step will be for the MGCB to prepare a report for the Joint Committee on Administrative Rules. At the same time, a final draft of the rules will go to the Administrative Rules Division for review. From there, it will be passed to the Legislative Service Bureau for formal certification.

The bigger problem at the moment lies in the other half of the equation, namely licensing. A dispute with the FBI over access to fingerprint records for background checks is currently holding that process up. Though that snag should be untangled soon, it is more likely to be the limiting factor in the timeline to launch than the process of finalizing the rules.

The jury is still out on what that timeline will ultimately look like. Operators themselves seem to be of mixed opinion. Some have suggested in corporate communications that they believe a fall launch is still on the table, while others seem resigned to waiting until early next year.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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