Michigan iGaming bill heads to governor for signature

21 December 2018

Michigan lawmakers last night approved legislation to regulate online gaming and sports betting across the state, with the bill now awaiting approval from outgoing Governor Rick Snyder before it can come into force.

Representative Brandt Iden’s (pictured) House Bill 4926, the Lawful Internet Gaming Act, was approved by the Michigan Senate, with 33 Senators backing the legislation, and just five voting against. It was then returned to the House, and passed with 71 votes in favour, and 35 against.

The legislation paves with way for a significant expansion of gambling in the state, with iGaming to be overseen by the Division of Internet Gaming, a new subsidiary of the Michigan Gaming Board.

The state’s tribal and commercial casinos will be eligible to apply for five-year online gaming licences, for an initial $100,000 fee. Successful applicants will then be required to pay a $200,000 licence fee for the first year of operation, then a $100,000 fee for each subsequent year.

Licensees will be able to offer games such as poker, blackjack, slots and other card and table games to players aged 21 and over. There is also scope for allowing licensees to offer sports betting, with the Division of Internet Gaming saying that has the power to permit operators to accept wagers on “any amateur or professional sporting event or contest”.

Operators will pay a tax of 8% of gross gaming revenue generated from iGaming operations, with commercial casino licensees required to pay an additional 1.25% tax. This is described as a municipal services fee, and will go to the city in which the venue is located.

This tax will be divided between a number of recipients. The city in which the licensee is based will receive 30%, to be used for programmes to improve quality of life for citizens, with 5% invested in the State School Aid Fund. A further 5% will go to the Michigan Transportation Fund, with 5% going to the Michigan Agriculture Equine Industry Development Fund.

The remaining 55% will be deposited in the Internet Gaming Fund, which is created through the bill. This will allocated $1m of the sum it receives to the state’s Compulsive Gaming Prevention Fund, with the remainder to be used for regulating the iGaming market.

The bill was approved alongside two others introduced by Iden, HB6420, which establishes a regulatory framework for daily fantasy sports, and HB5881. This amends the 1996 Michigan Gaming Control and Revenue Act, and sets out an 8% tax on sports betting gross revenue, as well as updating the existing legislation to cover online gaming.

HB6420 establishes a licensing system for daily fantasy operators, with applicants required to pay a $50,000 fee for a one-year licence, then $20,000 for each year-long renewal.

Image: Michigan House Republicans