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Online Gambling proposed in Michigan

29 April, 2016

 In good news for the industry, an online gambling bill has been introduced to the Michigan State Senate. The bill is Senate Bill 889, better known as the Lawful Internet Gaming Act, or LIGA. It was sponsored by Republican State Senators Mike Kowall and Marty Knollenberg and Democratic State Senators Curtis Hertel Jr, Rebekah Warren and Bert Johnson, and has been referred to the Committee on Regulatory Reform.

 

If the Bill passes it will authorize both online poker and casino games and the bill is expected to use the iGaming set-up in New Jersey as a model. To avoid conflict with the federal Professional and Amateur Sports Protection Act of 1992, sports betting will not be permitted online. The bill intends 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”. Access would be restricted to players 21 and over.

 

If the bill passes eight licenses will be made available, for both land-based Michigan casinos and Tribal casinos. However, tribes would have to waive their standard sovereign immunity vis a vis taxes, fees and fines in order to qualify for the licence. The bill will tax gross gaming revenue (GGR) at 10% and a $5 million licensing fee would have to paid, including a non-refundable $100,000 fee. Furthermore, it is important to note that while SB 889 does mention that vendors would receive a 5 year licence, the bill does not specify which vendors would be considered eligible for licensing. This opens up the possibility of interstate and international compacting. If passed, the process would be administered, regulated and enforced by the Michigan gaming control board.

 

It is not particularly surprising that Michigan is one of the states moving forward with online gambling, as it is also one of only three states that operates some form of legal online lottery. Furthermore, it is one of several US states currently debating the legality of Daily Fantasy Sports. This pre-existing experience and comfort with the idea of online gaming/gambling means that progress of the bill could be smoother and quicker than has been the case in other states. This means that if the Bill has the requisite support, it could potentially pass this year. However, there is the possibility that the bill stalls or is put on hold, considering that it is currently a presidential election year.

 

The introduction of this bill is fantastic news for the industry. At GAN we have talked about our optimism for movement concerning online legislation this year, and we maintain our position that as states start to legalise and earn money from online gambling, a domino effect will speed up progress exponentially around the country. For now, we will keep our eye on Michigan as one of the states with a promising outlook for 2016.

 

GAN previously wrote about prospects for legalising online gambling in 2016 here: http://gan.com/news/2016/03/online-legislation-prospects

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