Michigan Online Gambling

A look inside the new MI online gambling bill

In structure, not much has changed in the bill.

When the bill was initially introduced in the month of March, the following was noted:

It calls for state officials to make rules and regulations for the licensure and operation of online gambling sites within one year of the bill turning into a law.

For an online gambling license, only licensed Michigan casinos will be eligible. Different from the previous year’s bill, there does not seem to be a cap on the number of licenses that can be allotted.

Each player must be at least 21 years old and situated inside borders of Michigan.

It lets Michigan arrive into interstate compacts with other states and jurisdictions.

The amendments to the bill take into consideration the dynamic between tribal and commercial casinos.

Who regulates the tribes?

At the time when S 203 was first launched, it tasked the Michigan Gaming Control Board with licensing and regulating commercial and tribal online casinos.

That would basically make tribal online operators commercial online gaming operators. The alternative for tribes wishing to regulate online gambling in-house required amending their existing compacts with the state.

As per the latest form, tribes would make available online gambling as sovereign governments and self-regulate subsequent to amending their state compacts. The choice of working as a commercial online gambling operator would be taken off the table.

The tribe would be required to abide by the accountable gaming, age verification and other consumer securities governing the operators of state-regulated online gambling.

This was one of the principal grievances that were stated in a letter dated March 8 sent to Senate Regulatory Reform Committee Chair, Tory Rocca by the Nottawaseppi Huron Band of the Potawatomi Indians and the Saginaw Chippewa Indian Tribe of Michigan. Both of the tribes opposed the bill as written in the month of March.

The letter reads in part:

“The provisions allowing tribes to conduct internet gaming through amendments to their gaming compacts also fail to acknowledge that Indian tribes already have the right to conduct on reservation internet gaming for any Class II or Class III game the tribe is currently authorized to operate under IGRA and the tribe’s Class III gaming compacts with the state.”

Not so fast: 12-month online gambling moratorium

An associated variation to the language of S 203 would situate a 12-month suspension on the state’s commercial casinos once it comes to launch online gambling sites. This also necessitates the state to act on a request by a tribe within a period of 90 days.

The 12-month stay together with the 90-day timeframe to alter compacts to add online gambling would alleviate latent first-mover benefits of commercial casinos. In the letter of March 8, this was another issue that was brought up.

“Fundamental flaws in the legislation, along with a multitude of internal inconsistencies within its provisions, threaten to erode tribal sovereignty and provide an unfair advantage to competitor licensees,” the letter reads.

Does Michigan online gambling have a chance?

Besides, there are numerous interested parties:

The Senate, where the bill has backing;

The House, where the bill’s fortune appears less definite;

Gov. Rick Snyder, who’s been silent on the matter;

Tribal stakeholders;

Commercial stakeholders.

Earlier this year, Dave Palermo noted just from a tribal position that Michigan’s path to online gambling is troubled with downsides.

Even after this, Kowall is hopeful. However, even he assumes the online gambling discussions to drag on through the summer season and into the fall.

As per the May 19 article in Gongwer.com (paywall), Kowall is pretty poised that he has the votes to pass the bill in the Senate. Though he wants to ensure that the governor and Senate leadership is “comfortable with the language” prior to the proceeding.

Lack of support is somewhat surprising

Regardless of the pro-online MGM  one of the commercial gaming interests in Michigan, the support of stakeholders for the bill is missing, at least in public.

Both the state’s commercial casinos and tribal casinos haven’t favored the bill. The only entity entirely supporting the bill has been the parent company of PokerStars, Amaya. It has been vigorously endorsing the bill in Michigan.

Greektown, MotorCity, and MGM Grand Detroit are the state’s dozen gaming tribes that have either been quiet or on the record as unbiased or opposed to the bill.