Michigan is on the verge of becoming the fifth state to legalize online gambling. All that is needed is Gov. Rick Snyder’s signature on a new gambling bill that was passed early Friday morning.
In a best-case scenario, online poker and casino would go live in 2020.
Language could also permit sports betting down the road. For a more comprehensive look at that possibility, click here.
Dive into the bill
A major component of the bill is a 15-month moratorium on the launch of online gambling. This could be to allow all parties involved to launch at the same time, meaning online gaming would be set for a tentative 2020 release date.
The tax rate and licensing fees appear quite favorable to commercial and tribal casino interest.
- Licensing cost is $200,000 for five years, with a renewal of $100,000.
- The tax rate is eight percent of gross gaming revenue for all operators.
- Michigan’s three commercial casinos will pay a 1.25 percent tax to the city of Detroit.
- Language appears to allow for an interstate online poker agreement with other legal jurisdictions.
- The issue of skins — brands that can operate websites online – if left in the hands of regulators.
- Online gambling licenses are available to tribal operators as well.
As written, H 4926 would allow tribes to be licensed through the Michigan Gaming Control Board (MGCB). They would be exempt for the 1.25 percent tax and the extra payment according to the bill.
“This act only regulates internet gaming as provided in this act and does not extend to the division, or any other agency of this state, any jurisdiction or regulatory authority over any aspect of any gaming operations of an Indian tribe described in section 4(4)(b) beyond those rights granted to this state under the compact with the Indian Tribe.”
With tribes becoming commercial casino operators, it appears that there is no longer a need to amend tribal compacts. Although, language in the bill seems to allow tribes to do so if they choose.
Tax revenue disbursement
The tax revenue generated through online gaming will be allocated as follows:
- 55 percent to the state of Michigan.
- 30 percent to the city in which online gaming licensee’s casino is located.
- Five percent to the state school fund.
- Five percent to the Michigan Transportation Fund.
- Five percent up to $3 million to the Michigan Agriculture Equine Industry Development Fund.
- Beginning in 2020, a guaranteed $179,000,000 annually to the city of Detroit from gaming (land-based and online) or the state will make up the difference.
- Allocates $1 million per year to the Compulsive Gaming Prevention Fund.
Other online gambling states
Once Michigan joins the ranks, roughly ten percent of the US population will have access to legal online poker.
- Michigan – Population 10 million
- Pennsylvania – Population 13 million
- New Jersey – Population nine million
- Delaware – Population one million
- Nevada – Population three million
Michigan and Pennsylvania could also join the Multi-State Internet Gaming Association which already includes, New Jersey, Nevada, and Delaware. The group allows for the pooling of online poker players to create larger networks of players across state lines. With more players, online poker operators will be able to offer more games and larger tournament prizes.