Michigan Gambling Laws Under Focus

Publish: 02.12.2018

A set of new bills are waiting to be passed in the Michigan Senate to legalize online gambling and daily fantasy sports in the state. The internet-based overhaul of the gambling industry in the state could be helping the residents in jumping in on the trend and striving ahead of other states.

The Lawful Internet Gaming Act proposed by Rep. Brandt Iden was approved in the House in June this year, which is waiting for a vote in the Senate. If the bill gains enough momentum in the Michigan Legislature’s upper house, then it would provide a license to the three commercial casinos in the state.

Over 20 tribal casinos in the state will also offer online casino games to their patrons. The bill must be voted on before December 20, when the legislative session will end. If no votes are cast on the bill before the end of the year, the bills will die. Lawmakers have previously attempted to legalize online gambling in the state, but their efforts mostly went in vain.

The Lawful Internet Gaming Act, under H 4926, allows casinos in the state to operate gambling websites offering casino based games like poker, roulette, and blackjack. The revenues generated from online gambling will be taxed at 8 percent. Rep. Iden suggests that legalizing internet gaming will help in increasing the revenue to the state.

However, a recent House Fiscal Agency analysis suggests otherwise. They suggested that the overall gaming revenue could drop instead of rising because of the difference in the tax rates of the existing casinos in the state. Land-based casinos are taxed 19 percent on their revenues, which is more than twice as high as the revenue levied on the online games.

However, Rep. Iden isn’t convinced. He said that online gaming will not displace the existing casinos but create a new market for them to operate in. It could be helpful in attracting a newer customer, especially the younger, millennial generation which is more inclined to use mobile devices.

Another bill that would seek the Senate’s attention is the daily fantasy sports bill which was also sponsored by Rep. Iden. The bill is heading for a vote after being approved by the house earlier this week. The bill introduces a $50,000 license fee and $20,000 annual renewal fee which would leave a chance for only serious actors to operate in the market.

Rep. Iden noted that it was important to segregate online gambling from fantasy sports contests. He said that fantasy sports are a game of skill and not a game of chance. This is why he intends to tackle both the provisions in two separate bills.

H4926 also includes some provisions for sports betting, but it could be part of a separate sports betting bill which could be introduced to the lawmakers next year. The Lawful Internet Gaming Act divests the powers of regulation of online sports gaming to the Michigan Gaming Control Board.