Michigan attempts again to legislate online gambling

State Senator Mike Kowall had already tried to pass a bill in 2016.
State Senator Mike Kowall had already tried to pass a bill in 2016.

Michigan senators are making a new run at legalising online gambling in the northern US state in 2017.

US.- State Senator Mike Kowall introduced alongside five colleagues SB 203, which would authorise online gambling within Michigan borders. If passed, only Michigan’s commercial casino operators and federally recognised tribes with ongoing gaming operations would be eligible to apply for licenses. SB 203 “must include, but need not to be limited to, poker” and has a bumpy road ahead.

Last April, Kowall introduced a similar bill that had vast approval by the Senate Regulatory Reform Comittee, but eventually died out despite his confidence in it. David Murley, Gaming Control Board deputy director, said at a hearing last May that the previous bill “raised significant legal and policy questions” that would “need to be carefully considered” since it was big in interstate liquidity sharing.

2016’s SB 889 also faced trouble when it came to attention that Kowell’s wife Eileen works for the lobbying firm that represents online gaming giant Amaya in the state. Despite the potential conflict of interests, the senator denied that her employment at MGS Consultants posed any issues at all.

A deep issue for the bill is the new framework of regulation that would include both commercial and tribal gaming. Tribes would have to forgo their sovereing immunity, per SB 203, since states are not allowed to charge the tribes fees or taxes for gaming, beyond regulation costs, by the Indian Gaming Regulation Act. Said waiver makes highly unlikely to get the crucial, yet complicated, support from the tribes and may actually turn them against the bill for it might violate their gaming compacts. Currently, tribal operators are said to be “split” on online gambling.

SB 203 would tax operators 10 percent of gross gaming revenues. Last year’s bill required a US$5 million deposit to be credited against future tax obligations but it has been ditched this year. License applications will cost US$100,000 instead, and approved applicants will be charged a further US$200,000 once the license is issued, plus a yearly US$100,000 afterwards.

The Michigan Senate Regulatory Reform Committee has reportedly scheduled a hearing this week to assess the online gambling proposals. Having all six SB 203’s sponsors sitting on the nine-member committee, the session should go by smoothly.