Wednesday Hearing for Michigan Online Gambling Bill

MichiganA hearing of the Senate´s Regulatory Reform Committee has been scheduled for tomorrow (Wednesday) to discuss proposals for online gambling in Michigan.

Less than two weeks ago, Senator Mike Kowall introduced SB 889 – a bill that would legalize and regulate online gambling in Michigan. The introduction of the bill came as a surprise to many industry observers, who had not considered the Great Lakes State as a prospective candidate for regulation despite putting its lottery online last year.

If the introduction of the bill came as a bit of a surprise, then the announcement that the Regulatory Reform Committee will meet tomorrow to discuss the proposals probably caused several industry observers to fall off their chairs. However, the key message is do not get excited. There is a long way to go before online gambling in Michigan becomes a reality.

The Key Elements of the Bill

In its present state, Mike Kowall´s “Lawful Internet Gaming Act” is clear in some areas and has work to do in others. Kowall´s proposals allow for online poker and “other” casino games yet to be determined to be offered by up to eight Michigan-based licensees. The licensees would pony up $5 million for a five-year operator´s license, with the fee being offset against a 10% tax on Gross Gaming Revenues.

The Act allows for intrastate gambling compacts to be formed with other regulated jurisdictions – including those outside of the U.S. – and creates a Division of Internet Gambling that will have responsibility for (among other things):

  • Deciding what games can be played online in addition to poker,
  • What platforms can be used to gamble online (including mobile devices),
  • The criteria operators must meet before applying for a license (bad actors?),
  • Establishing player protection safeguards and the secure maintenance of their bankrolls.

As mentioned above, there is still a long way to go before online gambling in Michigan becomes a reality, but at least the bones of a bill are in place and there are few objections to the proposals from the usual suspects. Furthermore, as the four co-sponsors of the “Lawful Internet Gaming Act” sit on the nine-member Regulatory Reform Committee, there is likely to be any internal dissent coming from the committee members themselves.

Pappas to Represent Players at Hearing

Along with the announcement of the committee hearing, it was also revealed that John Pappas – Chief Executive of the Poker Players Alliance – would be testifying at the hearing on behalf of Michigan´s online poker community. The PPA was quick to mailshot its members in the Great Lakes State, asking them to send a prepared email to the committee members not involved in the introduction of the bill.

Unfortunately the email focuses on supporting yet-to-be-determined safeguards for player protection – a repeat of the faux-pas made by Pappas and the PPA in California. In California, proposals to regulate online poker have no safeguards in place to protect players´ bankrolls and prevent a repeat of the “Lock Poker scenario”. Yet Pappas is keen to refer to the Lock Poker scenario as often as possible during these hearings – damaging his credibility and the credibility of the organization he represents.

Pappas also engaged in a Twitter conversation last night in which it was suggested that the bill in its present state could be voted through for debate on the Senate floor:

The Chances for Regulated Online Gambling in Michigan in 2016

Most industry observers would agree that the chances for regulated [geolink href=””]online poker in Michigan[/geolink] this year are thin. Even if the bill progresses out of the committee stage to beat the legislative deadline, the Senate starts its summer break next month and there is plenty of work required for the current proposals to gain the two-thirds support they need to become law.

Having said that, there does not appear to be any obstacles preventing Mike Kowall´s Lawful Internet Gaming Act from being fast-tracked through the Senate. The efforts to put the state´s lottery online last year were successful and the state has benefitted financially as a result. In theory the passage of legislation to regulate online gambling in Michigan should be a shoe-in ….

…. but that´s what they said about Pennsylvania!

Jacqueline Packett
Jacqueline Packett