Michigan Legalizes Online Poker and Sports Betting
Michigan Legalizes Online Poker and Sports Betting
Michigan has officially legalized online poker, coming just in time as a great Christmas treat for gamblers in the state.
Governor Gretchen Whitmer signed a package of bills related to sports betting and online gambling on Friday, December 20. It comes almost exactly a year after former Governor Rick Snyder vetoed similar legislation, saying he wasn’t convinced that expanding gambling would offset losses already seen by the state lottery game system.
Whitmer originally expressed the same concerns, so lawmakers raised the tax rate on operators in a bid to demonstrate the industry could be profitable for the state.
In May, the Michigan Senate Regulatory Reform Committee held an information hearing where it was revealed that “The Lawful Internet Gaming Act” introduced by Mike Kowall had been three years in the making.
Online poker and casino operators will now have to pay between a 20 and 28 percent tax rate depending on their revenue. Sports betting will be taxed at 8.4 percent.
The new legislation is set up to support local causes, raising money for the School Aid Fund which helps provide money for public schools in Michigan. It is estimated that the fund will receive around $4.8 million.
Around $4 million of the revenue raised by online casinos will go to a fund to compensate Michigan firefighters who suffer from cancer due to exposure to toxic chemicals or smoke while at work. The fund provides a weekly compensation wage to workers and helps to cover some medical bills.
Upon signing the new bills, Whitmer told reporters, “My top priority in signing this legislation was protecting and investing in the School Aid Fund, because our students deserve leaders who put their education first.”
“Thanks in part to the hard work and leadership of [Democratic Sen. Curtis Hertel] and [Democratic Rep. Rebekah Warren], these bills will put more dollars in Michigan classrooms and increase funding for firefighters battling cancer,” continued the governor.
Rep. Brandt Iden, R-Oshtempo Twp., was the lead sponsor on the bills. In a statement, he said he was glad Michigan has entered “the modern era of gaming.”
“We’ll have a safe, regulated environment for the thousands of Michigan residents who for years have been forced to travel to other states or play on risky offshore sites," he said. “Our economy will benefit as jobs are created within a growing industry. Our schools and local communities will benefit from new revenue.”
Michigan is now the sixth state to legalize online poker for those 21 and older, following Nevada, Delaware, New Jersey, West Virginia, and Pennsylvania.
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Paperwork is also in place for the state to introduce daily fantasy sports websites and to update some regulations for Detroit casinos. A fee of $20,000 is to be paid for an initial license, with an annual charge of $5,000. The state hopes the smaller fee will encourage other companies to join the likes of FanDuel and DraftKings.
Legislators are hoping that some form of online gambling will be available by March, although no firm date has been set. Supporters of the legalization are eyeing the NCAA men’s basketball tournament as their first chance to place wagers.
The Michigan Department of Treasury has estimated that the legalization will bring in $19 million in new revenue for the state.
Included in the bills was the authorization of sports betting in the state, making Michigan the 20th state to give it the go-ahead. Of the 20 that have legalized sports betting, 13 states have sportsbooks up and running while the other 7 have passed bills, but have yet to begin taking bets.
How quickly Michigan can introduce sports betting will depend on how quickly it can set regulations for the new laws. Retail sports betting was already legal in the state - the Michigan Gaming Control Board has been telling commercial casinos they are welcome to seek authorization as an approved class III game for over a year.
Casinos had not acted because Class III games are taxed in the state at 22%, while the new legislation has set better rates. Now, casinos will have to pay $50,000 for an initial application, $100,000 for the license, and $50,000 annually.
The three bills signed last week:
HB 4311 - The Lawful Internet Gaming Act
This act allows the Michigan Gaming Control Board to issue licenses for online and mobile casinos. It allows for all current forms of land-based games to be transferred and played online, including online poker - and you can find the best online casino bonuses on the market here.
HB 4916 - The Lawful Sports Betting Act
This act legalizes sports betting in casinos as well as online and via mobile apps. It specifies that an internet sports betting wager received by a sports betting operator or an internet betting platform is considered gambling. Three commercial casinos and 23 tribal casinos will be able to offer sports betting after they are licensed.
HB 4308 - The Fantasy Contests Consumer Protection Act
This bill establishes the legal framework for fantasy sports contests to be regulated. Contests at either private or commercial levels that fit within regulated criteria will be legal in the state.
History of gambling in Michigan
Michigan is currently home to three casinos in Detroit: MotorCity Casino, Greektown Casino, and MGM Grand Detroit. Detroit is also close to 24 tribal casinos. The first tribal casinos were signed into action back in 1993, and 17 were operating by 1996. In November of the same year, a public referendum was passed by voters which allowed for the development of three commercial casinos in Detroit, the first of which was the MGM property.
Now, its brick-and-mortar industry consistently generates over $1 billion annually and has since 2001. It peaked at $1.424 billion in 2011. Michigan is also one of the few states where online lottery sales are legalized, with early indicators showing it to be a huge success.
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