Michigan Could Fast-Track Sports Wagering Launch Under Proposed Law

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Many in Michigan would love for retail sports betting to begin this calendar year during the NFL and college football seasons. By all accounts, that is still the plan — and the timeline is still attainable.

Under a proposed law that’s currently in the draft stage, Michigan gaming regulators could expedite the process of allowing books to open in the wake of the law potentially passing the legislature and finding a signature from the governor. The Detroit casinos have already signaled interest in opening sportsbooks.

That’s the ideal scenario, but there is still plenty of work to be done on the bill. The governor wants a 15% tax rate, while the sponsor is eyeing a rate of around 10%. There’s also a contentious online casino bill on the table that must also be enacted into law in order for legal sports wagering to come to the Wolverine State. The sports betting bill is tie-barred to the Michigan Lawful Internet Gaming Act.

It’s an all-or-nothing kind of thing.

MI Bets recently obtained a draft of the seventh version of the sports wagering bill. Stakeholders were asked to submit feedback by Thursday, July 11. The bill’s introduction could come later this month.

Provisions in the bill

The legislation would lead to the Michigan Gaming Control Board crafting regulations for sportsbooks, both retail and online/mobile. The three Detroit commercial casinos and the state’s more than 20 tribal casinos could have sports betting under the proposed law.

The MGCB would be required to implement official rules for sports betting within one year after the law becomes effective. That doesn’t mean sportsbooks would have to wait a year to open.

“The division shall promulgate rules governing the administration and conduct of sports betting necessary to carry out this act within 1 year after the effective date of this act,” said a section of the bill. “The promulgation of emergency rules does not satisfy the requirement for the promulgation of rules to allow a person to conduct sports betting under this act.”

A state law on administrative procedure that dates back to 1969 allows for the installation of emergency rules in a situation like this. Emergency rules are for when the state determines that little time should be wasted in order to ensure the “preservation of the public health, safety, or welfare.” The U.S. Supreme Court in May 2018 struck down the federal prohibition against sports betting, and the floodgates immediately opened with states across the country looking to regulate the activity, which currently happens as part of a robust illicit market. Proponents of legal and regulated sports wagering in Michigan often cite the underground market and the goal of creating consumer protections.

The law becomes effective 90 days after the governor signs it. But even before the “emergency rules” are laid out, the MGCB can begin getting to work. From another part of the legislation:

“The division may accept applications, require the payment of application fees for licenses, evaluate qualifications of applicants, and undertake initial review of licenses before promulgation of emergency rules, if applicable, on the effective date of this act.”

In other words, once the law becomes effective, the process of opening the books can begin. Companies could start getting their applications and plans together during the 90-day window before the MGCB would begin accepting and processing them. Basically, little if any time should be wasted once the governor approves the historic gaming expansion legislation.

Timeline

As mentioned, retail sportsbooks could potentially open roughly three months after the bill is enacted into law. The MGCB presumably would move swiftly once it’s allowed to process the applications. If the bill is delivered to the governor in early September, that could set up a December opening for Detroit books.

That’s around the time of the calendar year when Pennsylvania opened its first b&m sportsbooks. The first PA book opened in November of last year, with more books taking bets the following month.

Indiana, Michigan’s neighbor to the south, will likely open its first books in September. Michigan is not in a race with other states on the gaming front, according to the sponsor of the sports betting and online casino bills, but legal sportsbooks across the border surely will catch the attention of state policymakers and could provide motivation for passing legislation much earlier this year than in 2018. It took until late December last year for the Michigan legislature to pass the previous version of the Michigan Lawful Internet Gaming Act, as well as other gaming bills in the package.

The former governor ended up vetoing the gaming package.

If December rolls around without the passage of the sports wagering bill, that would mean Michigan would miss out of the football betting season. But books opening in time for March Madness could be the consolation prize. Michigan could have online/mobile up and running in time for the 2020-’21 football season.

Brian Pempus

Brian served as a senior reporter and online content manager for Card Player Magazine for nearly a decade before joining USBets in October 2018. He is currently focused on legal and regulated sports betting and online gaming. He's an avid jiu-jitsu practitioner in his free time.

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