While many expect either Pennsylvania or California to become the fourth state in the U.S to legalize online gambling, Michigan has taken further steps to push for the legalization of online gambling by introducing a new bill – SB 889.
The bill also termed as the ‘Lawful Internet Gaming Act’ was introduced by five senators and led by Senator Mike Kowall. The bill highlighted that Michigan had a strong online gambling market that needs to be tapped to generate tax revenue for the state, create jobs and also protect its residents from being exploited by illegal gambling sites.
The bill does not include sports betting but will cover online poker and online casino games. The SB 889 bill proposes a maximum of 8 online gambling licenses to be issued to federally recognized tribes who operate casinos in Michigan or private casinos licensed in the state and wants $5 million to be paid as an upfront licensing fee.
Operators will have to pay a ten percent tax on gross gaming revenues (GGR) on a monthly basis and have their licenses valid for a period of five years. Those licenses will be renewable with an additional five year validity and would require applicants to pay a $100,000 non refundable application fee.
The bill states that, “In order to protect residents of this state who wager on games of chance and skill through the Internet and to capture revenues and create jobs generated from Internet gaming, it is in the best interest of this state and its citizens to regulate this activity by authorizing and establishing a secure, responsible, fair, and legal system of Internet gaming that complies with the United States Department of Justice’s September 2011 opinion concerning 18 USC 1084.”
While the bill is clear that only those above the ages of 21 will be able to have access to these online gambling sites, the bill does not specifically limit access to players physically located in the state. This would suggest that legislators in Michigan have learned lessons from New Jersey and Delaware’s online poker industry and want to make sure that a similar occurrence does not happen in Michigan.
New Jersey and Delaware initially made it mandatory for players to be physically present in the state in order to have access to online poker websites and used geo-location technology to enforce this law. However, a limited online poker player database and a lack of competition severely hampered the growth of the online poker industry and Michigan has not emphasized this clause which could mean that collaboration with interstate compacts and even international markets could become a possibility should the bill receive approval.
