History Of Legal Gambling In Michigan

Updated on February 13, 2020

In December, Michigan legalized sports betting, online casinos, online poker and DFS.

It came as no real surprise, as similar legislation made it to the governor’s desk without being vetoed like last year. The Great Lakes State has a long history with other forms of legal gambling.

The other forms of gambling already legal in Michigan include:

  • Pari-mutuel wagering (horse racing)
  • Licensed charity gaming
  • Michigan Lottery
  • Tribal casinos
  • Detroit commercial casinos

There are 26 casinos in Michigan, including three commercial casinos in Detroit and 23 tribal casinos across the state.

Pari-mutuel wagering on horse racing has been legal in Michigan since 1933. However, there is only one live, simulcast horse racing venue left in the state.

Finally, the Michigan Lottery and laws governing charitable gaming have been around since 1972.

Here, we examine Michigan’s gambling history and take a deep dive into what you can bet on in the Great Lakes State.

Michigan gambling timeline

Below are some of the most significant dates in Michigan’s legal gambling timeline:

  • 1933: Michigan passes the Racing Act of 1933 to authorize and regulate pari-mutuel horse racing. The Office of Racing Commissioner is created.
  • May 16, 1972: Michigan voters approve a constitutional amendment authorizing the launch of a state lottery. The vote passes by a 2-1 margin.
  • Aug. 1, 1972: Then-Gov. William Milliken signs the Public Act 239 into law. With the Michigan Lottery launch, he appoints Gus Harrison as the state’s first Lottery Commissioner. Proceeds go to aid Michigan’s public schools.
  • 1972: Michigan passes Act 382. It allows nonprofit organizations to raise funds through licensed bingo games, millionaire parties, raffles and the sale of charity game tickets.
  • Nov. 13, 1972: The Michigan Lottery launches with ticket sales for the 50-cent Green Ticket game.
  • Nov. 24, 1972: The Michigan Lottery holds its first draw.
  • Feb. 22, 1973: Hermus Millsaps, of Taylor, wins the Michigan Lottery’s first $1 million.
  • January 1984: Keweenaw Bay Indian tribe member Fred Dakota challenges the state’s right to regulate Indian gaming. Dakota opens a single blackjack table casino, The Pines, in his two-car garage.
  • July 4, 1984: The Bay Mills Indian Band opens the first tribal-sanctioned casino in the state on tribal land in Brimley. Kings Club Casino is the first tribally owned casino in the US.
  • 1993: The Saginaw Chippewa Indian Tribe becomes the first tribe to sign a compact with the state. The tribe agrees to hand over 2% of winnings from the Soaring Eagle Casino & Resort in Mt. Pleasant.
  • Aug. 31, 1996: The first Big Game, now the Mega Millions, ticket sells in Michigan. It brings the first multi-state lottery game — in conjunction with Georgia, Illinois, Maryland, Massachusetts and Virginia — to Michigan for the first time.
  • November 1996: Michigan voters approve Proposal E, which authorizes the construction of three licensed casinos in Detroit.
  • 1997: The Michigan Gaming Control & Revenue Act passes and is signed into law. It authorizes the launch of three licensed casinos in Detroit.
  • July 29, 1999: The MGM Grand Detroit opens.
  • Dec. 14, 1999: MotorCity Casino Hotel opens becoming Detroit’s second commercial casino operation.

This century’s history

  • Nov. 10, 2000: Greektown Casino Hotel opens its doors in Detroit, becoming Detroit’s second commercial casino.
  • April 2013: Then-Gov. Rick Snyder proposes the introduction of online lottery sales.
  • November 2013: Michigan lawmakers reject Snyder’s plan to fund the launch of online lottery sales, but the Michigan Lottery uses existing money in its budget to move forward.
  • November 2014: Michigan’s iLottery officially launches, allowing players to buy tickets for instant keno and scratch-off game equivalents like Cashword and Pot O’ Gold from a computer, mobile phone or tablet device.
  • January 2016: The Michigan Lottery adds draw games to online sales. Players can purchase tickets online for the lotteries most popular draw games: Powerball, Mega Millions, Lotto 47 and Fantasy 5.
  • December 2018: The Michigan Legislature passes a bill legalizing online gambling. However, outgoing-Gov. Rick Snyder vetoes it.
  • December 2019: Michigan lawmakers pass a package of bills legalizing online gambling, sports betting, fantasy sports and online poker. Michigan Gov. Gretchen Whitmer signs the bills into law, inviting existing tribal and commercial casinos to apply for sports betting and online gambling licenses.
  • 2020: The first retail sportsbooks, online and mobile sportsbooks, online casinos and online poker sites will launch.

How does Michigan define gambling?

Michigan law initially defined gambling in the Michigan Penal Code Chapter 750, sections 301 through 315a and the Michigan Gaming Control and Revenue Act (Michigan Compiled Laws Chapter 432).

Gambling is defined as “accepting money or a valuable thing contingent upon result of a game, race, contest or happening of uncertain event.”

However, the state’s definition of gambling changed with the passing of the Michigan Gaming Control and Revenue Act in 1996.

This state law authorized the launch of three commercial casinos in Detroit and changed the legality of casino gaming.

Defining gambling in the Great Lakes State

The Michigan Gaming Control and Revenue Act defines a “gambling game” as “any game played with cards, dice, equipment or a machine, including any mechanical, electromechanical or electronic device which shall include computers and cashless wagering systems, for money, credit, or any representative of value, including, but not limited to, faro, monte, roulette, keno, bingo, fan tan, twenty one, blackjack, seven and a half, klondike, craps, poker, chuck a luck, Chinese chuck a luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingue, slot machine, any banking or percentage game, or any other game or device approved by the board, but does not include games played with cards in private homes or residences in which no person makes money for operating the game, except as a player.”

It also defines a “gambling operation” as the conduct of authorized gambling games in a casino.

Finally, the Michigan Gaming Control and Revenue Act defines “gaming” as “to deal, operate, carry on, conduct, maintain or expose or offer for play any gambling game or gambling operation.”

Currently, this is how Michigan law defines gambling as it pertains to online gambling as well.

Michigan Lottery history

Michigan voters approved a constitutional amendment authorizing the launch of a state lottery in May 1972. Public Act 239 was signed into law later that year, and the Michigan Lottery was born.

The Michigan Lottery officially launched with the start of the 50 cent Green Ticket game in November 1972.

Instant ticket sales started in 1975. Two years later, the Michigan Lottery introduced a computerized gaming system and the Daily 3 game.

By 1981, legislation passed ensuring lottery revenues would go into the state’s School Aid Fund.

In 1996, the Michigan Lottery got in the multi-state lottery game, beginning ticket sales for Big Game, which is now the Mega Millions.

Michigan lawmakers began talking about online lottery sales in 2012.

A year later, then-Gov. Rick Snyder proposed funding the launch of online lottery sales, but the Michigan legislators rejected the idea.

The Michigan Lottery went ahead anyway, using funds from its existing budget. Lottery officials soon selected lottery vendor Pollard Banknote and software provider NeoGames to design the state’s online sales system.

Michigan Lottery goes online

On Aug. 11, 2014, the Michigan Lottery soft-launched online lottery sales without advertising. Only players visiting the Michigan Lottery website were aware that online sales were available.

Ads for the Michigan iLottery began running in September. In November, Michigan’s iLottery officially launched. The iLottery allows players to buy tickets for instant keno and scratch-off-game equivalents from a computer, mobile phone or tablet device.

By January 2015, the Michigan Lottery said close to 87,000 players had registered for online lottery accounts. Online sales had generated $3.7 million for the state.

In February, the Michigan iLottery saw its first $1 million winner from a $20 online scratch-off game. 

A month later, the Michigan Lottery Players Club expanded to include online games with players earning two points for every $1 spent online. Club members can redeem points for entries into drawings for prizes or merchandise, including lottery free-play coupons.

In May 2015, the Michigan Lottery announced more than 133,000 online accounts had been created, and 300,000 instant tickets were selling online every day.

In January 2016, the Michigan Lottery added draw games that allow players to purchase tickets online for popular draw games, including Powerball, Mega Millions, Lotto 47 and Fantasy 5.

Sports betting becomes legal in Michigan

In December 2019, Gov. Gretchen Whitmer signed Michigan Lawful Sports Betting Act, legalizing sports betting in Michigan.

Michigan casinos, including the three Detroit commercial casinos and 23 tribal casinos across the state, are invited to apply for Michigan sports betting licenses.

Each comes with a $50,000 application fee, $100,000 license cost and a $50,000 annual renewal fee.

Sports betting operators will also be responsible for paying an 8.4% tax on sports betting revenue. Plus, Detroit casinos that choose to offer sports betting will have to pay an additional 3.25% tax to the city.

The licenses entitle holders to offer sports betting at casinos and online.

Casinos can hire a third-party to run sports betting operations, such as US sports betting leaders DraftKings Sportsbook, William Hill and FanDuel Sportsbook. However, they are limited to using only one internet sports betting platform.

Officials are hoping the first legal retail sportsbooks can go live in Michigan by the time the 2020 NCAA Men’s Basketball Tournament tips off on March 17.

Rules and guidelines governing Michigan sports betting still need to be created before licensing can begin. However, Detroit’s commercial casinos should be able to get the Michigan Gaming Control Board’s approval to start taking wagers on the property before the tournament starts.

Online and mobile wagering will likely take a little longer before it goes live in Michigan, thanks to a lengthier approval process. That said, the first Michigan mobile sports betting apps will go live in 2020.

Timeline for charity gambling in Michigan

Michigan lawmakers passed Act 382 in 1972, allowing nonprofit organizations to raise funds through licensed bingo games, millionaire parties, raffles, and the sale of charity game tickets.

The act also allowed for the licensing of bingo halls and charity gaming suppliers.

Act 382 was revised on March 12, 2007, to include the full Michigan Charitable Gaming Rules.

This revision essentially sets out the rules for general charitable gaming, licensing, bingo, millionaire parties and the conduct of any charitable gaming activities in Michigan.

Basically, charitable gaming activities are legal in Michigan, provided they are run by a nonprofit organization that has gone through the proper licensing process.

Daily fantasy sports in Michigan

Daily fantasy sports (DFS) contests have been operating in Michigan since 2006 when DraftKings and FanDuel first rose to prominence.

The passage of the Michigan Lawful Sports Betting Act in 2019 essentially legalized and regulated DFS contests in the state.

Operators must apply for a license with the state. However, companies outside the Michigan casino business are welcome to apply, including DFS market leaders DraftKings and FanDuel.

Michigan fantasy sports licenses come with a $10,000 initial fee and a $5,000 annual renewal cost.

Michigan will tax fantasy sports revenue at a rate of 8.4%.

Of course, home fantasy leagues with 15 players or fewer, and playing for less than $10,000 total can still operate without a license.

History of horse racing in Michigan

Michigan made pari-mutuel wagering on horse racing legal in 1933.

But with the state’s lone remaining horse racing facility, Northville Downs, celebrating 100 years of live racing in 2017, it is clear horse racing has been around in Michigan for even longer than that.

Northville Downs still hosts two harness racing meets each year, from early March to late June and from early September to late November. Racing is on Friday and Saturday nights.

Plus, simulcast races and wagering for both thoroughbred and harness racing are available seven days a week all year round at Northville Downs, from noon until midnight.

Once a popular pastime

Of course, the Michigan horse racing industry is a shadow of what it once was.

Hazel Park Raceway closed in 2018 after seven decades of hosting live horse racing in southeastern Michigan. It was the fourth Michigan track to close since 2007 and the eighth since 1998, leaving only Northville Downs.

From 2006-16, gambling revenue at Michigan tracks fell from $22.1 million to $4.2 million. The number of tracks went from 10 to two in that same time. 

Before the advent of the Michigan Lottery and casinos, Michigan horse racetrack revenue peaked at $443.1 million.

In other words, waning public interest in the sport and the availability of various forms of legal gambling have all but destroyed Michigan horse racing.

Other states have helped prop up local horse racing industries by allowing tracks to install slots and casino games. However, Michigan has stood pat, much to the dismay of industry veterans that have long lobbied for the addition of casino gaming at Michigan tracks.

In the past four years, nationwide wagering on live and simulcast races is up and in the billions.

There aren’t any off-track betting (OTB) locations in Michigan or racebooks at casinos.

Michigan online casinos and online poker

In December 2019, Gov. Whitmer signed a package of gambling expansion bills passed by the Michigan House and Senate, which legalized everything from sports betting to online casinos and online poker.

The first online casino sites should go live in Michigan this year after the creation of new online gambling guidelines and a licensing process takes place.

Only existing Michigan casinos, including the three Detroit commercial casinos and 23 tribal casinos across the state, can apply for Michigan online casino licenses to operate casino-style games like blackjack and slots and poker online.

These five-year licenses come with a $50,000 application fee, $100,000 initial license cost and a $50,000 annual renewal fee.

Michigan’s online gambling revenue is subject to a tiered-tax structure, starting at 20% for adjusted gross receipts of less than $4 million and peaking at 28% for more than $12 million. 

Detroit commercial casinos will also pay an additional 1.25% city tax on online gambling revenue.

Players should take note of the fact operators who offer free play to gamblers will be given a tax break

The law allows for Michigan online casinos to deduct 10% from the gross receipts for free play for the first three years, 6% in the fourth year and 4% in the fifth.

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