Most of the US online gaming legislative action is happening on the East Coast. But there a couple of states in the Midwest making some waves: Michigan and Illinois.
Michigan is a bit further along than Illinois, but it still has its fair share of challenges.
Michigan was one of the first states to jump into the online lottery pool. On the back of its online lottery success, lawmakers in the state have decided to turn their attention to an online gaming bill. But online gaming is proving a difficult nut to crack.
In pursuit of online gambling, Michigan lawmakers ran into a couple of roadblocks.
- It’s unclear if the state can legalize online gambling without passing a constitutional amendment.
- The state possesses both commercial and tribal casinos. This requires lawmakers to thread the proverbial needle in order to bring the two sides together.
A look back at previous efforts
Michigan’s online gaming ambitions first came to the surface in April 2016. That’s when Michigan State Senator Mike Kowall introduced SB 889, a bill seeking to legalize online casino and online poker in the state.
The bill sought to:
- Authorize poker and casino games;
- Restrict access to players 21 and older;
- Limit licenses to Michigan-based commercial casinos and tribal casinos;
- Set a $5 million licensing fee – including an upfront, nonrefundable $100,000 fee; the $5 million fee would be used as an advance payment against future taxes owed;
- Establish a 10 percent tax on gross gaming revenue.
The bill appeared to have a lot of early momentum and seemed to move in the right direction. Then, it stalled and eventually petered out.
Subsequent bills introduced by Kowall and State Rep. Brandt Iden in 2017 took a similar approach to legalizing and regulating online gambling. They suffered the same fate as Kowall’s 2016 effort. Neither measure solved the tricky problem of bringing commercial and tribal casinos together.
What needs to happen for the bill to progress
If online gambling legislation is going to have a fighting chance in 2018, Michigan will likely need to resolve both issues mentioned in the opening.
First, the state will need to get some clarity on whether a constitutional amendment is required to pass an online gambling bill. It’s not imperative, but without legal clarity, lawmakers will have an easy out, and support for the bill will be difficult to muster.
The real challenge for Michigan lawmakers is finding a way to appease the state’s tribal casinos without alienating its three commercial casinos. So far, that has proven difficult.
Rather than bringing the two sides closer, an attempted compromise put forth by Iden in 2017 ended up driving the two sides further apart. The “compromise” bill received even less stakeholder support than previous efforts.
At the end of the day, there’s a lot of work to be done before an online gambling bill is going to pass in Michigan.
