Michigan Bill: Legalizing Online Casino and Poker Sites

michigan online gambling blill

Editors Update: Michigan online casinos and Michigan poker sites are fully legal and operational in the state. The post below remains published for archive purposes.

Senator Mike Kowall and four co-sponsors introduced a senate bill last week that seeks to legalize online poker and casino games in Michigan. Senate Bill 889 offers a comprehensive approach to online gaming that includes legalization, regulation, taxation and a licensing system.

The bill paves the way for a maximum of eight online gambling and poker licenses to be issued to current land-based casino licensees and tribes authorized to conduct gaming activities. These licensees would also be able to contract with online gaming vendors to supply goods, software and services.

Potential licensees would be required to pay a nonrefundable application fee of $100,000 to the newly-created internet gaming division. If accepted, an additional licensing fee of $5,000,000 would be required. Licensees will then be on the hook for a 10% tax on gross gaming revenues to be paid monthly.

Licensed operators would also be required to enforce a minimum age of 21 for customers, provide self-exclusion programs for players and give players the ability to set deposit limits, wagering limits and time limits.

Compacts with Other States and Foreign Jurisdictions

One of the most unique aspect of SB 889 when compared to similar measures introduced in other states is that it gives Michigan the option to enter compacts with foreign jurisdictions and not just with other US states.

From the bill:

“The division may enter into agreements with other gaming entities, including foreign entities, to facilitate, administer, and regulate multijurisdiction Internet gaming to the extent consistent with state and federal laws and the laws of any foreign jurisdiction. For this purpose, the division may enter into multijurisdictional agreements with other states and foreign jurisdictions.

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.”

Previous bills floated by lawmakers in other states allows interstate compacts, but none have so far given a state the authority to enter compacts with overseas entities. Agreements with other countries, such as the UK for example, could lead to Michiganders playing at poker tables with players from the UK and elsewhere.

Such compacts would be beneficial for players and operators alike. Operators would have access to a larger player pool, which would increase liquidity, make for busier games and make it easier to attract new players. Players would likewise benefit from having access to a larger player pool, which means more game selection and busier games at all stakes.

SB 889 could potentially give US players legal access to an international player pool for the first time in years. If successful, the bill could also serve as a model for future legalization efforts. This is promising considering the difficulty in getting anything passed at the federal level.

Does SB 889 Mention Sports Betting or Daily Fantasy?

SB 889 does not mention Michigan sports betting. As far as traditional sports wagering goes, states are prevented from authorizing or regulating sports betting by the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). For Michigan or any other state to legalize sports betting, PASPA would need to be repealed or modified at the federal level.

Michigan daily fantasy sports is also not addressed in the bill. The executive director of the Michigan Gaming Control Board has gone on record saying it is his opinion that daily fantasy sports violate state gaming laws, but that was not a formal legal opinion. However, a senate bill introduced in 2015 does seek to exempt daily fantasy sports from the state’s existing legal definition of gambling.

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