State Senator Mike Kowall Sponsors Michigan Online Gambling and Poker Bill
An online gambling bill has been introduced to the Michigan State Senate. The proposed law is Senate Bill 889, better known in Michigan’s legislature as the Lawful Internet Gaming Act (LIGA).
If SB 889 passes, then Michigan will have legal online poker and online casinos. The bill is expected to use the New Jersey iGaming law as a model. Other states which have considered legalized Internet gambling, such as California and Pennsylvania, have introduced bills which only legalized online poker.
Mike Kowall Co-Sponsored SB 889
Senator Mike Kowall (R-Lansing) joined with four other Michigan state senators in sponsoring the bill. Mike Kowall said the bill is meant to protect residents who play games of skill and games of chance online for real money. SB 889 also is meant to license, regulate, and tax such gaming. While the tax revenues would be fairly small, Michigan’s Treasury would like to collect more revenues without raising taxes.
Kowall also mentioned he hoped the bill would create jobs in Michigan. He did not elaborate on how that would happen, though licensing would be through brick-and-mortar license holders. In other states, local casinos have partnered with international online gambling software companies like 888 Holdings, PokerStars, and Bwin.Party, which provide online technical support in exchange for a split of the winnings.
SB 889’s Provisions
Under terms of the law, only 8 online gaming licenses would be available. Tribal casinos in the state would be allowed to apply for a license, while state-licensed private gaming ventures also would have the right to apply for a license.
If granted a license, the online operator would need to pay a one-time licensing fee of $5 million. Any group applying for a license would need to pay a $100,000 non-refundable fee, so an applicant which was turned down would lose the hundred-thousand dollars.
Once the online casinos and poker rooms were in operation, they would need to pay a 10% tax on all revenues won through gaming. Tribal casinos would need to waive all sovereigh immunity, meaning their online gambling ventures (but not their land-based operations) would be subject to the same fees, fines, and taxes as the private non-tribal casinos.
Interstate and International Vendors
Also, the bill mentions that vendors could apply for licensing. These vendors would receive a 5-year approval to operate inside Michigan. No mention was made of which vendors would be considered eligible for licensing. The bill seems to open the door for interstate and international software providers. A license holder would get technical support from the software providers, avoiding the expensive and time-consuming task of producing proprietary casino and poker software.
UIGEA Compliance
To remain legal under the Unlawful Internet Gambling Enforcement Act of 2006, online sports betting would be banned. The UIGEA states that the online operation of any form of gambling made illegal under the 1961 Wire Act, is itself illegal. The Wire Act bans sports gambling, so online sports betting would be illegal under the LIGA gaming law.
Would Nearby States Be Banned
Geolocation software would assure that only gamblers inside Michigan would be able to gamble on the new websites. Geolocation software is advanced enough that players from Ohio, Indiana, or Wisconsin would not be able to gamble at Michigan-area websites. Anyone familiar with the precision of their car’s GPS system knows how effective geolocation software can be in tracking an individual’s whereabouts.
The question of whether state licensed online gambling might compromise the rights of other US states has been challenged before. Arguments against online poker and casinos based on such thinking have been answsered several times.
Length of Time for Passage
Elections years are a time fraught with peril for many lawmakers, so bills are sometimes overlooked when a pivotal election is just over the horizon. Political analysts believe the Lawful Internet Gaming Act is likely to passed this year, if it has the support it needs to pass at all.
Michigan is one of three US states which offers legal online lottery sales. Michigan is one of only 2 states which allows the sale of online instant win lotto games. This familiarly with online gambling law might help speed the process along in the Michigan legislature.
In recent years, the legislative processes for online gambling have been fraught with peril, especially in states like California and Pennsylvania. Both of those states have significant land-based gaming interests, which have tried to influence the legislative process. In either case, attempts to squelch competition has complicated the matter for everyone.
