The Michigan Department of Attorney General has issued a warning regarding a new wave of illegal gambling machines infiltrating the state. Michigan Attorney General Dana Nessel has described the machines as “skill games,” which resemble casino slots.
Nessel is working with the Michigan Gaming Control Board (MGCB) to curb the latest threat of illegal gambling. The only legal forms of gambling in the Great Lakes State comes from the lottery, online casinos, online sports betting or visiting any one of the 26 casinos.
The illegal gambling market hurts Michigan residents. Nessel wants educate the public on the harms of these machines. She said in a statement:
“The gaming industry is strictly regulated to promote a safe and fair gambling environment. It’s crucial gamblers understand the risks associated with illegal gaming machines before using them.
“My office has worked closely with the Michigan Gaming Control Board (MGCB) to dismantle illegal gambling operations and remains committed to this partnership to protect Michigan consumers.”
Michigan remains fierce in combating illegal gambling
The MGCB had always been strict with fighting any and all illegal machines throughout the state. It doesn’t appear that it’s stopping either. Henry Williams, Executive Director of the MGCB, said in a statement:
“Illegal gaming remains a serious threat to Michigan residents and their communities. Unregulated machines often result in financial harm and other associated problems. Additionally, these illegal operations cause a loss of state revenue, depriving schools and communities of vital funding.
“The Michigan Gaming Control Board is dedicated to upholding gaming regulations and safeguarding the integrity of our state’s gaming industry. We will continue our efforts to eliminate unauthorized machines and prevent them from being repurposed for unlawful use.”
One of the most notable illegal gambling uncoverings happened last summer at the Red Horse Bar in Saginaw. During that process, an executive of the Michigan Licensed Beverage Association accused the MGCB of sending “threatening” letters to business owners.
MGCB Public Information Officer, Lisa Keith, told PlayMichigan in June that the regulator stands by how it handles illegal gaming in the state. Ultimately, the MGCB is protecting legal gambling, as well as consumers, she said in June:
“Gaming machines used illegally lack the necessary consumer safeguards that licensed and regulated establishments provide, leaving the individuals who use them susceptible to unfair practices.”
Description of illegal gambling machines
The Michigan Department of Attorney General describes the features of these unlawful games of skill. Some of those include multiple wheels and symbols with cherries, sevens, and bars. Certain games even let players adjust a wheel to line up the symbols.
The Michigan Department of Attorney General does not believe that makes them games of skill because of the following explanation:
“Despite claims of ‘skill,’ these games rely on preset outcomes or random number generators, making them games of chance. Winnings may be given in cash, gift cards, or other prizes, which violates Michigan law.”
Many other states are in the same boat, including Connecticut. Its Department of Consumer Protection (DCP) sent out a warning similar to Michigan’s at almost the same time, which contained an important detail: Aside from being illegal, unregulated gambling machines offer much worse odds than legal slots.
The DCP found that some of the machines it seized had returned only 66% of wagers to players. Although its release doesn’t explicitly mention that they are skill machines, an accompanying photo shows games that PlayMichigan has determined to be nudge-based skill games produced by Banilla and Jenka Lab.
Regulated retail and online casinos have a required rate of at least 80% in Michigan. However, most slots in the state are much more generous, with 94% to 96% being typical for online slots. RTPs for retail slots may depend on denomination but values in the low 90s are normal.
What redemption machines are legal in Michigan?
Some of these gambling devices attempt to skirt the law by awarding prize vouchers rather than cash. That muddies the waters because certain “redemption games” are legal under the Michigan Penal Code Act 328 of 1931.
The games are lawful with many stipulations, including the involvement of skill and prizes that do not include cash. However, if such a machine awards vouchers, they must only be redeemable within the establishment offering the game. More importantly, the value of the merchandise or vouchers awarded from a single play can’t exceed $3.75.
In other words, these are essentially carnival or arcade games like skee-ball and toy cranes. However, some skill game manufacturers attempt to exploit confusion around those rules by passing off games that award gift cards as legal.
