Michigan On The Move: Expect iGaming By Thanksgiving

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In December 2018, Michigan State Representative Brandt Iden got coal in his Christmas stocking when then Gov. Rick Snyder vetoed a package of iGaming bills. This year, he’s hoping for something a whole lot nicer, and, with any luck, a whole lot earlier.

Ever the optimist, Iden on Wednesday said he’s hoping to be able to place a sports bet from his mobile phone by Thanksgiving — and a Michigan Gaming Control Board spokesperson backed him up, saying it “expects internet sports betting to begin by late fall.” That timeframe is even more aggressive than it was last month, when it appeared the MGCB was aiming  to launch mobile sports betting and iGaming operators in mid-December.

“Even with the pandemic and ongoing issues, the good news is that the regulators were able to do a lot of this work at home, drafting rules, and now this process has moved on,” Iden said during a webinar titled “iGaming & Sports Betting Advocacy in the COVID-Era: What’s Changed & How Industry & Policymakers Move Ahead. “We’re shooting for Thanksgiving-ish. I think we’re in a great spot to be able to have us up and running online, assuming companies are there and have platforms set, certainly by the end of the year, and hopefully by Thanksgiving.”

Many steps remain on path to live mobile

The MGCB has scheduled a public hearing on the proposed rules for Sept. 23. Once that is complete, the proposed rules must be submitted to the Michigan Office of Administrative Hearings and Rules and the Legislative Services Bureau for certification. After that, the MGCB will submit the proposed rules to the  Legislature’s Joint Committee on Administrative Rules (JCAR). That is expected to happen in October, and the proposed rules must be in committee for 15 session days before approval.

According to the gaming control board, JCAR could hold a hearing on the rules or waive the opportunity to review them. Upon approval from JCAR, the rules will then be submitted to the Office of the Great Seal, at which point they become effective.

Iden, who shepherded iGaming and sports betting through the state legislature, was participating in a webinar that is part of the iDEA Growth Power Lunch Summit, and was joined by fellow lawmaker Indiana Senator John Ford, FanDuel Counsel for Policy and Government Relations Director Cory Fox, and Group Deputy General Counsel, Kindred Liv Biesemans. It was moderated by John Pappas, founder and CEO of Corridor Consulting.

An avid Michigan State fan, Iden may have to place his Thanksgiving bet on the Detroit Lions, who will play their annual Thanksgiving Day game against the Houston Texans. Michigan State plays in the Big Ten, one of two Power-5 conferences that postponed their fall sports seasons. Iden placed one of the first retail sports bets in the state on March 11 at the MGM in Detroit. He put down $100 for Michigan State to win the Big Ten.

 

iGaming, sports betting were always coupled

Wednesday’s panelists discussed everything from which states might legalize next to consumer protections to how legalizing sports betting and iGaming are two different pathways in most states.

In Michigan, Iden was always aiming to legalize both simultaneously, and after that 2018 Christmas nightmare, he had a merry day in 2019 when Gov. Gretchen Whitmer signed off on a package of iGaming and sports betting bills. Since then, Michigan’s three commercial casinos in Detroit and some tribal casinos across the state have opened for retail sports betting. The next step is mobile sports betting and iGaming.

In-person sports betting started on March 11 in Michigan, but was quickly halted due to sports cancellations and stay-at-home orders related to the COVID-19 crisis. But through it all, the MGCB has been steadily working toward a mobile launch.

While lawmakers in other states have been focused on legalizing sports betting, with the idea that iGaming would follow, Iden packaged them together. In fact, Iden’s 2018 package of bills didn’t specifically name sports betting. Rather the legalization of iGaming would have laid the foundation for sports betting.

Education was key to legalizing iGaming

Iden did acknowledge that wrapping the two together required a lot more education and discussion with his peers than a strictly sports betting bill might have.

“I think we had a very robust debate over four years. I was tasked with educating two governors and 180 (legislative) members (on sports betting and iGaming),” Iden said.  “There is a very big difference. The perception of gaming in general — and it doesn’t really matter what jersey they wear, red or blue — they are hesitant. I think there is a lot of hesitation with iGaming when it comes to addiction.

“The big thing that we saw here in Michigan, the drastic difference for both governors was in taxing. My colleagues decided if we’re going to move down the path of iGaming, we’re going to tax it at this very high rate. iGaming is really very different, and it’s about education. The internet is the best way to deal with problem gaming. We can track the way they bet, the amount they bet … we have a much better way of regulating players on the internet than when they are playing in person. We can regulate this better, this is all about consumer protection. Once you make that argument, it’s amazing how fast legislators turn the corner.”

Michigan will tax iGaming at 9.1% (10.9% in the city of Detroit) while mobile sports betting will be taxed at 8.4%.  Under the terms of the federal Indian Gaming Regulatory Act, tribal casinos cannot be taxed, per se, but Michigan’s tribes agreed to monthly payments equaling 8.4% of adjusted gross sports betting receipts.

Indiana lawmaker to follow Michigan’s lead

In neighboring Indiana, where sports betting operators went live with retail sports betting in September 2019 and mobile/online in October 2019, Ford said he will be bringing iGaming to the state legislature in 2021, and he’s been preparing to re-educate his colleagues.

“We are arming ourselves and will educate our colleagues and the public to some extent,” Ford said. “We also with sports wagering … did 3% more (in funding) to help with problem gaming and with iGaming, I would think we would do the same.

“We have to educate. And people didn’t understand the gray market — they didn’t understand that people could bet on their cell phones and that is was that easy. We still have some people in Indiana that don’t believe that there is a gray market out there at all.”

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Jill R. Dorson

Jill has covered everything from steeplechase to the NFL and then some during a more than 30-year career in sports journalism. The highlight of her career was covering Oakland Raiders during the Charles Woodson/Jon Gruden era, including the infamous “Snow Bowl” and the Raiders’ 2003 trip to Super Bowl XXXVII. Her specialty these days is covering sports betting legislation across the country.

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