Last updated: May 28, 2018 at 3:51pm by Savanah – A bill (HB 4926) to legalize online gambling (poker and casino games) was revised and reintroduced this month to the state legislature. Two internet gaming bills were introduced last year. HB 4926 was introduced on September 12, 2017 and on March 1, 2017 SB 203 was introduced. A week later SB 203 passed the Senate Regulatory Reform Committee (7-1 vote), but it did not receive a vote from the full House. The legislation includes a $100,000 application fee, $5 million license fee, and a 10% tax rate on the online gambling revenues.
Online Poker in Michigan – Estimated Date of Legalization: 2018-2019
Legalized gambling began in many states with a state-run lottery, but by the early 1990’s many also had approved for-profit gambling enterprises such as casinos (several owned and operated by Indian tribes), riverboats, and video-lottery terminals (VLT’s) at bars and restaurants.
The Michigan gambling industry is composed of private commercial casinos, Native American Class III casinos, a state lottery, charitable gaming and pari-mutuel horse racing. Nothing in Michigan Law specifically states that gambling on the internet is illegal. As stated in an article by gambling-law-us.com;
“In 1999 Michigan adopted SB 562, which made it specifically unlawful to use the Internet to violate certain provisions of Michigan’s anti-gambling laws, including sections 750.301 through 306 and 750.311. In 2000 Michigan adopted Public Act 185 which repealed the references to those anti-gambling sections. Thus, Michigan is not a state that has in effect a specific prohibition against using the Internet to make, offer or accept bets over the Internet.”
When the Unlawful Internet Gambling Enforcement Act of 2006 (or UIGEA) passed nothing much changed other than adding more confusion.
Established in 1972 by the P.A. 239, the Bureau of State Lottery governs the Michigan Lottery, which makes the rules governing the games and oversees the issuance of bingo, lottery, and charitable gaming licenses. The bureau is housed in the Michigan Department of Treasury. 50% of lottery revenue is used for prizes, and about 35 percent goes to the state School Aid Fund. The sales of lottery tickets online was passed and went live in November 2014. The state lottery generated total revenues of $2.8 billion in 2015, up 6.8% compared to the previous year.
Horse racing is Michigan’s oldest form of legal gambling, established in 1933. Some reports show that Michigan’s current five horse race tracks had more than 2,000 days of live and simulcast racing, total attendance of over 1.2 million people, with roughly $350 million in wagering that generated more than $11 million in state revenue. On January 17, 2010 the Michigan Gaming Control Board (MGCB) officially assumed the duties of the Office of the Racing Commissioner (ORC).
The Charitable Gaming Division of the lottery was created by the Bingo Act of 1972 and licenses non-profit organizations to sponsor bingo, casino nights, raffles, and millionaire parties as fundraisers. The division issues over 10,000 licenses annually to qualified organizations such as religious, veterans’, fraternal, education, senior citizen, service groups, and political committees.
Native American tribes are sovereign nations. As such, the State of Michigan does not have general regulatory authority over Indian Casinos, although the State does have oversight authority over compliance with the State-Tribal Compact provisions. They are regulated by the National Indian Gaming Commission and the government of the appropriate tribal community. There are currently 22 Indian Casinos and 3 private casinos in the state of Michigan. 11 different Native American tribes cover the 22 Indian Casinos.
Private Casinos – Michigan Gaming Control and Revenue Act of 1996
The Michigan Gaming Control and Revenue Act was approved in December 1996. Although it was amended in July of 1997, it allows for the development and licensing of three privately owned casinos within the city of Detroit. As part of this bill the Michigan Gaming Control Board was created to oversee those casinos. You can read the full Michigan Gaming Control & Revenue Act, it’s only 34 pages long, or you can read below for a few of the highlighted points:
- Authorizes three licensed commercial casinos in the City of Detroit
- Conducts and imposes certain taxes and fees on casinos and others involved in casino gaming
- Gives the Michigan Gaming Control Board exclusive authority to license, regulate, and control the three authorized Detroit casinos
- Requires safeguards by casino licensees to prevent compulsive and underage gambling
- Issues civil and criminal penalties for violation of the Act
- Prohibits political contributions by parties with interests in casino and supplier license applicants and licensees to state and local political candidates and committees
- Provides for the distribution of casino tax revenue for K-12 public education in Michigan, and for capital improvement, youth programs, and tax relief in the City of Detroit
- Issues funds for compulsive gambling prevention programs
In 2015, Detroit’s three casinos had an increase in revenue, $1.38 billion, compared to the previous year which did $1.33 billion.
Michigan Gaming Control Board
The Mission Statement for the gaming control board is:
“The Michigan Gaming Control Board shall ensure the conduct of fair and honest gaming to protect the interests of the citizens of the State of Michigan.”
The Board serves Michigan citizens by licensing and regulating commercial casinos in Detroit, their suppliers and employees, overseeing Native American casinos in Michigan, and regulating pari-mutuel horse racing.
The Michigan Gaming Control Board’s website mentions on April 11, 2012, Governor Snyder signed Executive Order 2012-4 resulting in more effective regulation of certain charitable games. This Executive Order transfers regulation of “millionaire parties” from the Michigan Bureau of State Lottery’s Charitable Gaming Division to the Executive Director of the Michigan Gaming Control Board. The state has been under scrutiny since its charity gaming revenues increased from $7.9 million in 2004 to $197 million in 2011. Regulation of other forms of charitable gaming such as bingo and raffles will remain with the Lottery.
For the most up-to-date information and news on Michigan Gambling Laws, licenses, gaming associations, government officials, etc., we recommend visiting MichiganGaming.com. They post news articles on a regular basis with the latest stories in Michigan gaming. They have been around for over 18 years with a strong staff and contributors of lawyers and gaming analysts specializing in this field.
Author: Savanah Lavinder
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