Michigan Senate Passes Online Casino Bill, Awaits Governor’s Signature

On Thursday, the Michigan Senate approved a House measure to legalize and regulate online gaming. The measure will likely become law.
Michigan state capitol

This is a developing story.

The Michigan Senate has made history by passing House Bill 4926, the Michigan Internet Gaming Act. Lawmakers voted in favor of the measure 33-5 at around 10 p.m. local time in Lansing on Thursday.

The legislation went down to the wire, as the Senate convened this week to consider a slew of legislation on the table before the 2018 session came to a close. It wasn’t known that the measure was going to receive a vote. It passed shortly before lawmakers went home for the night.

Under the new law, Michigan’s online gaming industry will include peer-to-peer poker and other casino games, under the regulation of the Michigan Gaming Control Board.

The legislation passed the Michigan House of Representatives in June, but it stalled in the Senate. Michigan had tried to legalize online casino gaming for several years, without success until now. Under the legislation, the state would seek to share online poker players with other online gaming states.

Thanks to passage in the Senate, the measure returns to the House for approval, and then to the desk of Gov. Rick Snyder, a Republican. There’s no sign Snyder will veto the measure.

Michigan will more than likely join Nevada, New Jersey, Delaware and Pennsylvania as the only states with legal online gambling.

A previous Michigan online gaming effort sought to have the legislation originate in the Senate, but eventually the issue was spearheaded by Rep. Brandt Iden, a Republican, in the House.

Tax rate

Under the legislation, Michigan will tax gross online gaming revenue at 8%. There’s an 8.1% state tax on the retail gaming at the Detroit casinos, with an additional 10.9% tax for the city.

The Michigan online gaming measure will seek to grow the state’s existing $1.4 billion casino gambling market, which has been flat in recent years.

An internet gaming license would cost $200,000, with a $100,000 annual fee thereafter. An internet gaming platform provider will have to pay $100,000 initially and $50,000 for renewal.

Deal between Detroit casinos and tribes?

Iden has said that he would need to find consensus among the state’s tribal casino groups and the three commercial casinos in the Motor City. The legislation enables the tribes to negotiate new compacts with the state if they wish to offer online gaming from their land.

The tribes would have to sort out revenue sharing with Michigan in order to launch games to individuals statewide.

Online poker liquidity sharing

If upcoming Pennsylvania and Michigan online poker industries join forces with Nevada, New Jersey and Delaware, there would be around 36 million people exposed to an interstate online poker market. That could create enough of a player pool to make the vertical interesting again.

Online poker is currently on the decline in New Jersey, while the other online casino games continue to grow rapidly.


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