Legal Online Gambling News

Future of Michigan casinos while Michigan Lottery dives in

Jul 06, 2018

If you’re a resident and wondering whether your state is dragging their feet on the legislation for Michigan online casinos and gambling, you may well be onto something!

A staggering 28 cents of every dollar earned by the Michigan Lottery is contributed to the state’s School Aid Fund, meaning that privately-run internet gaming websites could effectively be muscling in on the state’s own gambling monopoly.

To put this in further context – in the past 5 years the state via the School Aid Fund has contributed $4.1 billion dollars to this very worthy and socially essential cause. The politicians and legislators accordingly are most probably grappling with the ramifications of having this passive source of income re-directed away from something as essential as education.

Michigan House during the final day of its legislative session for the week managed to pass the Lawful Internet Gaming Act; however, this does not mean that casinos, sportsbooks and online poker sites are legal. The Great Lakes state will still require Governor Rick Snyder’s signature and approval from the state Senate – and that is virtually impossible until the session this Fall.

Requirements for the three commercial casinos in Detroit’s jurisdiction to launch online gambling are also pretty tough. Each will have to pay an $800,000 licensing fee, and will be liable for 8% tax on all gaming revenue. Something else that the state will need to attend to is the renegotiating of compacts with no less than 23 tribal casinos, and that could also take a significant amount of time.

Michigan has effectively had state-run gambling since 2014 with the launch of the Lottery in August of that year.

Initially, MI Lottery online sold tickets for games like Scratch-Off and Instant Keno, and by 2015 they were already generating $3.7 million in sales; a short time later in 2016 the Digital Gaming Group acting as a consultancy for the state indicated that $8 million was being spent by locals weekly. Record sales!

MI Lottery now offers in excess of 30 instant-win games, and many of the games function in exactly the same way as online slots. The sounds, animation and the ability to keep playing until one runs out of funds, operates no different to what one would find in a commercial gambling establishment. 

It will be interesting to see how the state addresses this conflict of interests in forthcoming months, and whether any changes will be made to provisions to cushion the anticipated loss of income to the state.

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