Different Interpretations of Michigan iGaming Hearing

MichiganTwo industry observers, both watching the same live feed of an iGaming hearing in Michigan, have offered different interpretations of how the hearing went.

Yesterday, Michigan´s House Regulatory Reform Committee held a hearing to discuss the pros and cons of a bill to regulate online gambling in the Great Lakes State. The bill (HB4926) had only been introduced a few days previously by the committee´s chairman – Rep. Brandt Iden – and was a version of Senator Mike Kewell´s bill (SB203) that [geolink href=”https://www.usafriendlypokersites.com/michigan-igaming-proposals-pass-senate-committee/”]passed the equivalent Senate committee earlier this year[/geolink].

The difference between the two bills is primarily that tribal casinos will be given the opportunity to apply for online gambling licenses by amending existing compacts with the state. The tribes would self-regulate their online activities and there would also be a revenue-sharing agreement equivalent to the proposed tax rate of 15% less allowable deductions.

The amendments to the original proposals have not got all of the state´s tribal casinos on board. Some still have reservations about cannibalization of their existing operations. The amendments have also driven the state´s three (previously neutral) brick-and-mortar casinos to oppose the bill due to the difference in tax rates they would have to pay on their online revenues.

Same Hearing. Different Interpretations

The informational hearing was live-streamed on the House Television Committee Channel and watched eagerly by industry observers. However, in their respective reports on the hearing, there was a wide difference of opinions on what the future prospects were for regulated online gambling in Michigan. These different interpretations were typified in the first two reports to be published.

Writing for the pro-regulation affiliate site, Online Poker Report, Dustin Gouker focused on the opening comments of the bill´s primary sponsor (“iGaming will become law at some stage”), on the positive testimony from former state attorney general Mike Cox, and the “tone” of consumer protection measures, revenue for the state, and general support for the bill.

However, writing for Calvin Ayre, Steven Stradbrooke reported the hearing promised little progress for the bill. Instead of highlighting the pro-regulation speakers, Stradbrooke focused on the testimony of Michigan Gaming Control Board deputy director David Murley. For more than a year Murley has been [geolink href=”https://www.usafriendlypokersites.com/momentum-lost-regulated-online-gambling-michigan/”]warning of the legal issues[/geolink] of regulating online gambling, and yesterday his warnings were just as stark.

Two Interpretations. Which is Right?

By a mile Stradbrooke was on the button. While pro-regulation observers were hailing the hearing as a “meaningful iGaming progress”, there does not appear to be any progress on the constitutional issues first raised by David Murley in May 2016. The movement of the brick-and-mortar casinos from neutral to opposed should also be of concern to legislators, and Chris Krafcik – Research Director at Gambling Compliance – summed up his opinion of the hearing in one succinct tweet:

Another issue that should be of concern to pro-regulation observers is Brandt Iden´s disturbing lack of knowledge about the current state of unregulated online gambling in Michigan. During the PPA´s testimony in support of the legislation, Iden made uneducated comments about Bitcoin – interrupting John Pappas´ failed attempt to circumnavigate the building´s Internet filter.

There was no vote taken at the end of the hearing, and the prospects for regulated online gambling in Michigan depend on numerous factors. Undoubtedly background talks will take place aiming to resolve the differences between tribal concerns and brick-and-mortar casinos, but there also has to be some discussion about the constitutional issues and the possibility that the Michigan Gaming Control Board may have to manage up to twelve different regulatory structures once tribal compacts are amended.

Despite writing positively about the prospects for regulated online gambling in Michigan, Dustin Gouker commented in his article, The smart money isn´t on that happening this year.

Jacqueline Packett
Jacqueline Packett