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Michigan is on the cusp of launching online casinos, as well as other forms of online gambling. At the moment, the best estimate for a launch date is around Thanksgiving.
As 2019 drew to a close, Michigan ended years’ worth of debate and finally legalized online gambling. Late in December, Governor Gretchen Whitmer signed into law a pair of bills known as the Lawful Internet Gaming Act (LIGA) and Lawful Sports Betting Act (LBSA). Together, they covered the full spectrum of gambling options, including online casino, online poker, retail and mobile sports betting, and even daily fantasy sports.
There’s always a delay between the legalization of online gambling and its launch, however. Often, it can take a year or more, and the original expectation was that the online verticals would go live some time in early 2021.
Conversely, retail sports betting was launched relatively quickly in March 2020. Alas, the timing was terrible. The state’s casinos shut down just days later, and professional sports started seeing their seasons suspended or cancelled due to COVID-19.
The silver lining to that misfortune was that it highlighted the need for an online option. The regulatory and licensing processes have been stepped up as a result. As of this writing, the Michigan Gaming Control Board (MGCB) is entering the final stages of rule-making and processing license applications. Michigan residents should get to place their first real money online casino bets before the year is out.
Michigan still awaits the launch of its first online casino. According to the Lawful Internet Gaming Act, anyone with a casino license under the Michigan Gaming Control and Revenue Act can be issued an interactive gaming operator license — in other words, the three commercial casinos in Detroit:
Any Indian tribe lawfully conducting a casino in the state in accordance with the National Indian Gaming Commission can also apply for an interactive gaming operator license.
There are around two dozen tribal casinos in the state, with the FireKeepers Casino Hotel in Battle Creek, the Four Winds Casino Resort in New Buffalo, the Gun Lake Casino in Wayland, the Kewadin Casino in Sault Sainte Marie, and the Soaring Eagle Casino in Mt. Pleasant among the largest.
Each operator can only launch a single casino brand, though they have the option to use a separate brand for poker. With only three commercial casinos in the state, the one-brand-per-operator limit means that the tribal casinos will be very important as partners. That’s one major way in which Michigan is very different from other online casino states.
Michigan will no doubt follow the path of other states’ online casinos and offer access via both web-based browsers and mobile devices. Logging onto the online casinos via the latter method will involve downloading a free app that will in most respects provide the same functionality as users experience when playing online casino games on their desktop or laptop.
Typically online casino apps are available the most popular types of devices:
Android users won’t be able to download apps from the Google Play Store since it does not allow gambling apps. They will, however, be able to download apps directly from the licensing casino’s website.
Apple users will be able to download apps from the Apple Store, although thanks to Apple’s policy requiring gambling apps to be built on the native iOS (and not coded in HTML5), that will mean the online casino will have needed to build its own iOS app.
In other states such as Pennsylvania, some online casinos offer iOS apps, some offer Android apps, some have both and some have neither. Also worth mentioning, in some cases the online casino is accessed through the online sportsbook app (and vice-versa).
In any case, users will want to consult each online casino to find out what options are available when it comes to using apps on mobile devices.
The law allows those with licenses to operate online casinos to offer games that “include, but need not be limited to, poker, blackjack, cards, slots, and other games typically offered at a casino.”
That means Michigan online casinos will no doubt include the usual array of slots, table games, and video poker found in most online casinos. Online poker is allowed as well. There is no specific mention of live dealer games in the new law, although they would appear to be allowed as well.
Online casinos typically offer a wide variety of depositing methods, including some or all of the following:
In most cases, online casinos offer fewer ways of withdrawing, although that can vary from online casino to online casino. Often users will withdraw funds using the same method they used to deposit, which means choosing a deposit method for which withdrawing by the same method is an available option.
For many online casinos, ACH / eCheck, PayPal, and regular checks work both ways, while depositing and withdrawing at the licensing retail casino’s cage is always available as well.
Michigan online casinos will no doubt offer “welcome bonuses” to encourage sign-ups. These can come in many forms, including:
No-risk bets let first-time users try out games without spending any of their own money. No-deposit bonuses work similarly, giving players money with which to play the games without forcing them to deposit first. These bonuses can’t be withdrawn — you have to wager with them, and you can keep whatever money you win.
Matching bonuses go to first-time depositors, often matching the amount of the deposit 100% up to a prescribed limit. Those bonuses also must be wagered (i.e., cannot simply be withdrawn), and usually within a certain time period (e.g., 30 or 60 days).
Online casinos often offer reload bonuses, referral bonuses, double-points deals, and other benefits to players, too.
Michigan online casino players should also keep an eye out for loyalty or rewards programs which typically work a lot like they do in retail casinos.
For example, MGM Grand Detroit has its M Life Rewards program that gives casino players cash or “comps” according to how much they play. It is likely MGM Grand Detroit will offer something similar to those who play in their online casino.
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Michigan senators have passed SB 991, which would allow the state to form compacts with other regulators for the sharing of online poker traffic.
Two iGaming hearings in Michigan passed without event this week, bringing the state closer to launching online casinos, poker, and sportsbooks.
An interstate online poker bill goes to the Michigan Senate, while a hearing on online gambling draft rules will take place this week.
Today, Michigan lawmakers will hold a public hearing on a bill which would open the door for the regulator to enter interstate compacts for poker.
The state is in need of money, and online gambling would provide a consistent revenue source. Also, competition from surrounding areas threatens the future prosperity of Michigan’s land-based industry. Online gambling expansion is viewed as a way to remain competitive.
Beyond that, lawmakers realize that online gambling is already prevalent in the state, thanks to the presence of black market operations. By legalizing online gambling, the state hopes to curtail black market activity, whilst bringing in substantial tax revenue.
Along the same lines, legal online gambling is seen as a means to provide players with consumer protection benefits that are not offered by offshore sites.
The Lawful Internet Gaming Act legalizes poker, casino games and slots, sports betting, and daily fantasy sports. Daily fantasy sports was already up and running in the state, while retail sports betting launched in March 2020. Online sports betting and other forms of online gambling likely will not become available until 2021.
According to the law, an “authorized participant” or player of online casino games in Michigan must be 21 years of age or older and also physically located in Michigan when playing. Players need not be Michigan residents to play, but must be in Michigan in order to play. The sites are responsible for ensuring both requirements are met via age verification and geo-location technology.
The Michigan Gaming Control Board (MGCB) establishes the rules, issues licenses, and regulates online gambling in the state.
Any of the three Detroit commercial casinos or tribal casinos in the state is eligible to obtain an interactive gaming operator license and operate an online casino.
An earlier version of the Lawful Internet Gaming Act contained language explicitly allowing Michigan to enter into a multi-state agreement and allow online poker sites to share player pools with other states with legal, regulated online poker. However that provision was removed from the bill that was signed into law. It is therefore unclear at present whether the lack of such a provision will present any difficulties for Michigan online poker sites that wish to form such alliances.
The bill features a tiered tax structure, so estimating tax revenue is a little tricky.
State tax is on a sliding scale, ranging from 8% to 23%. The three commercial casinos would additionally be required to pay 3.25% to the city of Detroit. Conversely, tribal operators would get a tax break.
Exactly how much tax is generated depends on how revenues are distributed between the various operators, but estimates are it is unlikely to be less than $15 million annually and could easily be twice that.
The best means of predicting gross gaming revenue in Michigan from online gambling is to compare the performance of the New Jersey online gambling industry. NJ has a population of close to 9 million, and so provides a good comparable to Michigan and its population of close to 10 million.
During its first full year of operation in 2014, NJ online gambling generated $122.9 million, spiking to $196.7 million by 2016. Based solely on this, Michigan online gambling operators might expect to gross somewhere in the vicinity of $135-$140 million during the industry’s first year.
In reality, the figure could be much higher. There have been big improvements in geolocation services, payment processing, and marketing efforts since 2014. Accounting for this, Michigan’s first year tally from online gambling could be more in line with what New Jersey generated in its third.
Michigan has long been a gambling-friendly state. The Michigan Gaming Control and Revenue Act signed into law in 1997 paved the way for three commercial casinos in Detroit, and the state is likewise home to about two dozen tribal casinos.
For a brief period starting in 1999, Michigan lawmakers expressly outlawed online gambling, although the following year that legislation was repealed. Thus from 2000 forward, there was no specific prohibition against online gambling in Michigan, although no legislation sanctioned it, either.
Starting in the mid-2010s, lawmakers took up the topic of online gambling in earnest.
Michigan first threw its hat into the online gambling arena in April 2016, when State Sen. Mike Kowall introduced a bill that would have regulated both online poker and casino games within state lines. The core arguments for passage, as stated in the bill, were to create new revenue streams for the state and to offer consumers and the state protection from offshore gambling sites.
Kowall’s bill moved through the legislative process at a rapid clip. In May, the Michigan Senate Regulatory Reform Committee held an information hearing, where it was revealed that SB 889 had been three years in the making.
Optimism rose in June when the bill sailed through a Senate Regulatory Reform Committee vote 8-1. Unfortunately, that would prove the apex of the 2016 effort, as the ensuing months were marked by inaction.
There were rumblings that the legislation would tackle online gambling upon reconvening in November, but with a limited number of session days left the prospect of the Senate passing what was ultimately a nascent and flawed bill seemed bleak.
This despite, assurances from Kowall that there was “plenty of time” in 2016 for SB 889 to push through the various legislative chambers.
In the end, the bill was never brought up for a full Senate vote.
Under the version of H 4311 which ultimately passed, license holders have to pay a $50,000 application fee, followed by $100,000 licensing fee at the time the license is issued. The cost to renew is $50,000 annually thereafter.
License applicants are limited to the state’s commercial casinos and federally recognized tribes which presently operate a Class III casino operation in Michigan. There is no hard cap on the number of licenses, however. With three commercial and 25 tribal casinos, it’s likely that many licenses will eventually be issued. Thus, the upfront revenues for the state should be significant, probably to the tune of two or three million depending on how many tribal casinos apply.
Lawmakers supporting online gambling in Michigan faced a significant challenge to craft a bill answering to the competing interests of both the Detroit commercial casinos and the state’s tribes. Early in the 2017 session multiple online gambling bills were proposed, including a couple more by Sen. Kowall.
As happened the year before, the Senate Regulatory Reform Committee passed a bill though once again it failed to move further. By September, however, a new version of the bill emanating from the House Regulatory Reform Committee sponsored by its chair Brandt Iden gathered more support.
Momentum slowed during the next few months, however an amended version of the legislation was passed by the committee in December, ensuring it would be taken up again at the start of the following year’s legislative session.
Rep. Iden’s bill was reintroduced during the 2018 session and was passed by the House. The Senate then amended the bill and passed it in December 2018, and after the House passed that version as well it was sent to Governor Rick Snyder for his signature.
The new bill was a triumph of compromise, having found a way to satisfy both the Detroit casinos and the tribes with one provision being the Michigan Gaming Control Board would oversee online gambling offered by both commercial and tribal-owned casinos.
Snyder had reached the end of his allotted two terms as governor, and among his final acts in office Gov. Snyder vetoed the online gambling bill (along with about 40 other bills). sending lawmakers back to the drawing boards.
Proponents overcame their disappointment, and by March had already proposed bills again, with Rep. Iden continuing to be a sponsor on the House side and State Sen. Curtis Hertel doing so from the other chamber.
The fact that new Governor Gretchen Whitmer had signaled her support of legalizing sports betting even before taking office was a positive sign, and soon it became clear she would be favorable to expanding other forms of online gambling in the state as well. Prospects were bullish for a new “Lawful Internet Gaming Act.”
Iden’s House bill made it through committee again, then after being coupled with other bills was met with some resistance from Gov. Whitmer who disagreed with how some of the legislation was written.
During the late summer and early fall negotiations appeared at a standstill and some lawmakers were beginning to think Michigan might be going another year without passing online gambling legislation.
Compromises were again reached, however, and in late October the House passed H 4311, a package of bills legalizing online casinos, sports betting, online poker, and daily fantasy sports. The Senate amended the language and passed it, the House passed the amended version, and Gov. Whitmer signed the bills into law on December 20, 2019.
The new year began with several different online gambling partnerships being formed in MI.
The Stars Group and the Little Traverse Bay Bands of Odawa Indians struck up an alliance, FireKeepers Casino Hotel and Scientific Games did the same, and William Hill and the Grand Traverse Band of Ottawa and Chippewa Indians also partnered up with eye toward the British group powering the tribe’s sportsbook at Turtle Creek Casino.
As noted above, retail sportsbooks opened briefly in March 2020 before the COVID-19 pandemic forced the closure of all casinos in the state.
Meanwhile, regulators made clear in late January that it would likely take more than a year before the first online casinos or online poker rooms would be opening.