After the state of Michigan made headlines in the US online gambling industry last week when the Senate Regulatory Reform Committee held a hearing on an online poker bill, SB 889, many are asking questions about this new bill.
Online gambling analysts believe that Republican State Senator Mike Kowall’s Lawful Internet Gaming Act has a reasonable chance of becoming law. This makes Michigan one of the most likely states to join Delaware, Nevada and New Jersey on the growing list of states who introduced laws to legalize and regulate online gambling.
So What Do We Know About SB 889?
Senator Kowell’s SB 889 will essentially allow online gambling within the framework proposed in the Act. The state will create a Division of Internet Gaming under the auspices of Michigan’s already established Gaming Control Board, which will have the power to issue internet gaming licenses to applicants if they meet the restrictions set out in the law.
How Much Will an Online Gambling License Cost?
Operators will pay a $100,000 application fee, as well as a $5 million license fee. The license fee will be an advance payment of igaming taxes. Licenses will be valid for five years and can be renewed for additional five year periods.
Who Can Apply For a License?
Licenses will only be issued to casino licensees, or – under specific conditions – Michigan Indian tribes that operate gaming facilities. Up to eight internet gaming licenses will be issued. Vendors will be certified by the Division of Internet Gamin to provide goods, software and/or services to licensees.
Will Online Gambling be Taxed?
Yes. Under SB 889, the Division of Internet Gaming will impose a tax of 10% on the gross gaming revenue received by licensees from authorized internet games.
What Responsible Gaming Steps Will be Taken?
Licensees will need to have adequate gaming participant verification measures, as well as ways to detect and prevent fraud, collusion and money laundering at their sites. The Division of Internet Gaming will need to establish a statewide gaming database with the names of individuals who are not allowed to open an internet wagering account or participate in internet gambling. In addition, an Internet Gaming Fund will be created, and fees and taxes will be required to be deposited into the fund to be spent on purposes indicated by the Legislature.
