Michigan Misinformation Goes Into Overdrive

MichiganParties both for and against online gambling in Michigan have gone into overdrive and are spreading misinformation about the pros and cons of regulation.

The muckspreading about regulated online gambling kicked off yesterday with the release of a report warning against the cannibalization of Michigan´s brick and mortar casinos if online gambling was regulated in the Great Lakes State. The report was compiled by Meloria Solutions LLC on behalf of an unknown client of lobbying firm McAlvey Merchant Associates.

As well as using out-of-date and unsubstantiated data to conclude that the regulation of [geolink href=”https://www.usafriendlypokersites.com/michigan/”]online gambling in Michigan[/geolink] would result in a 28%-30% decline of casino tax revenue, the report suggested that – because of the lower proposed tax rate – online gambling would have to produce a net increase in gambling revenues of 141% in order to maintain the status quo.

Report Exposed as “Ridiculous”

The report – “The Potential Impact of Online Gambling on Commercial Casino Revenue” – was rightly exposed as ridiculous by Steve Ruddock writing for OnlinePokerReport.com. Ruddock also expressed concerns that a fear of cannibalization was delaying the progress of Senator Mike Kowell´s “Lawful Internet Gaming Act” (SB 889) in the Senate.

Ruddock´s concerns were prompted by a letter to “Michigan lawmakers” penned by PPA Executive Director John Pappas, who claimed that the “Big Lie about Online Gaming Cannibalization” was attributable to wealthy, out-of-state special interests opposed to online gambling in Michigan (as opposed to the wealthy, out-of-state special interests who fund the PPA).

Pappas went on to make his own ridiculous claims in the letter, such as tens of thousands of Michiganders are gambling online on black market sites hosted in Russia and China. Pappas urged Michigan´s legislators to pass the “Lawful Internet Gaming Act” in order to stop illegal activity, protect consumers and raise revenue for the state – none of which are guaranteed by the passage of the bill.

Dissecting Pappas´ Ridiculous Claims

In a state with a population of almost 10 million, it is more than likely that many thousands of Michiganders gamble online. However the implication that Russian and Chinese operators are rampantly defrauding gamblers, stealing their identities and preying on minors is equally as ludicrous as the cannibalization claims made by Meloria Solutions LLC.

Furthermore, there is no language in the Lawful Internet Gaming Act that prohibits gambling at offshore sites, and no language in the Lawful Internet Gaming Act that protects consumers. These are issues that will be addressed in the future by a yet-to-be-established Division of Internet Gambling, or – if following the pattern set in Pennsylvania and California – not addressed at all.

With regards to raising revenue for the state, doubts exist that there will be any. A Fiscal Impact statement attached to the current version of SB 889 raises concerns that the costs of regulating online gambling in Michigan could exceed the potential revenues – especially as licensed operators will be able to waive future tax liabilities against their initial license fee.

What´s Really Delaying the Lawful Internet Gaming Act

Amongst all the muckspreading and misinformation overdrive, there is one pertinent fact that everybody seems to have overlooked. According to Article IV §41 of the Constitution of Michigan, it would appear that any expansion of gambling in Michigan has to be approved by a majority of voters in a statewide general election. In its entirety, the article states:

The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law. No law enacted after January 1, 2004, that authorizes any form of gambling shall be effective, nor after January 1, 2004, shall any new state lottery games utilizing table games or player operated mechanical or electronic devices be established, without the approval of a majority of electors voting in a statewide general election and a majority of electors voting in the township or city where gambling will take place. This section shall not apply to gambling in up to three casinos in the City of Detroit or to Indian tribal gaming.

This means that, in order for the Lawful Internet Gaming Act to be enacted, there will likely have to be a statewide general election or a change in the constitution – a much bigger consideration than cannibalization and consumer protections, and one that should stop the muckspreading and misinformation overload in its tracks. We bet it doesn´t though.

Jacqueline Packett
Jacqueline Packett