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Michigan Lawmakers Want Quick Start for Online Gaming

Written by Jennifer Newell
Last updated on
Jennifer Newell

The journey to online poker and casino games in Michigan has been years in the making and remains a work in progress.

After years of lawmakers like Michigan State Representative Brandt Iden pushing bills to legalize internet gaming and sports betting, those efforts became a reality late last year when lawmakers approved it and Governor Gretchen Whitmer signed it.

Those same lawmakers are now anxious to approve regulations and move the process forward so online gambling sites may launch sooner rather than later because, well, Covid-19.

A Path to iGaming Site Launches

In normal times, it could easily take a state one year or more to establish a regulatory system for internet gaming, issue licenses, and supervise site launches. Pennsylvania slow-rolled its process for two years before the first online poker site launched. So, the initial prediction that Michigan online poker may not launch until 2021 wasn’t a far-fetched one.

These are not normal times. There is the little matter of a global pandemic this year that threw every business in America into some sort of upheaval.

All Michigan casinos and gambling establishments closed their doors in mid-March as a part of a nationwide effort to stop the spread of Covid-19. Revenue dropped to zero and stayed that way through May and into June. Meanwhile, they watched a couple of other states rake in substantial revenue form their online gaming sectors during the coronavirus shutdown.

The latest numbers from just the month of May were:

—New Jersey total internet gaming win: $85,939,942

—Delaware total igaming net: $1,134,900

—Pennsylvania internet gaming revenue: $55,838,789

Nevada collected revenue, too, but the state doesn’t release that information at this time. And as for the revenue number listed for Pennsylvania, keep in mind that the first igaming sites only launched less than one year ago.

Michigan lawmakers know that any type of online gambling revenue during a time of casino shutdowns would be helpful. And as the coronavirus issue lingers and threatens a resurgence in the fall months, they want to fast-forward to internet gaming opportunities before then.

Not an Emergency

As mentioned, the initial prediction of an internet gaming launch date was general, but the Michigan Gaming Control Board itself issued that estimate. There was a far-off hope of a site or two launching in the fourth quarter of 2020, but no one wanted to get their hopes up.

Then, the pandemic arrived. Michigan was particularly hard hit and become a hot spot for the virus.

In mid-May, several lawmakers asked Governor Whitmer to use emergency rules under the Administrative Procedures Act of 1969 to expedite online gaming site launches. She denied the request but did say that her office would work with lawmakers to complete the process “without delay and as swiftly as possible.”

Michigan Gaming Control Board Executive Director Richard Kalm also said that the MGCB was starting the licensing process earlier than planned.

It Might Require Legislation

Several members of the Michigan Senate – from both parties – introduced a bill last week to allow all casinos eligible for online gambling to launch sites before MGCB finalizes its statewide regulations.

Democratic State Senator Adam Hollier sponsored SB.969, along with seven Democrats and two Republicans, and introduced it on June 16. Its purpose would be to allow for casinos to “conduct internet gaming without a license until social distancing guidelines related to the Covid-19 pandemic are no longer in place.” Additionally, the bill would allow casinos to “contract with out-of-state parties to provide internet gaming platforms.”

Hollier told MiBiz that the purpose of the expedited process for internet gaming was revenue. “Casino gaming is a significant revenue source for a variety of governments across the state and is used for essential needs,” he said.

Meanwhile, MiBiz spoke with MGCB spokesperson Mary Kay Bean about the official online gaming rules, and she didn’t seem to indicate much ability to expedite the process. She said the administrative rules are in development and sites could launch by early 2021. She added that “it could happen by late this year if all goes well during the rulemaking process.”

Needless to say, Hollier and his bill cosponsors proceeded with the bill. It now sits in the Committee on Regulatory Reform, but it remains untouched thus far.

October Launch?

Contrary to Bean’s statement, the MGCB is moving at a bit of a clip. It is accepting licensing applications for online gaming suppliers hoping to obtain provisional licenses.

One week and a more direct response from a MGCB member can change things, though.

Online Poker Report spoke with MGCB Deputy Director David Murley, who spoke of a much quicker process taking place. “I think there’s a general feeling that commercial casinos, tribal governments, the executive branch, and many legislative leaders want to move these rules along,” he said. “Right now, the way we’re moving, the month of October is realistic to get the rules to the legislature and get licensing done as well.”

Murley also noted that the Joint Committee on Administrative Rules could move quickly when it receives the rules and approve them in two days instead of taking a standard 15 days to review them.

Multi-State Online Poker Bill in Progress

One of the primary sponsors of the original bill to legalize online gambling in Michigan, State Senator Curtis Hertel Jr., also told OPR that he working on another bill.

The new bill will legalize the sharing of online poker site player pools across state lines. This is the agreement already signed by Delaware, New Jersey, and Nevada, though the only site to yet use it across state lines is the WSOP.com site on the 888poker platform. Pennsylvania has yet to sign on to the agreement, though it only launched its first online poker site in November 2019.

Hertel said that his original Lawful Internet Gaming Act prohibited interstate prize pools but only by mistake, as that was meant to apply to slot games only. His new bill will authorize prize pool sharing for online poker sites only, and he plans to introduce the bill in the coming months.

 

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