The month of February came and went without a reintroduction of the Michigan Lawful Internet Gaming Act, a piece of legislation that was among a handful of bipartisan-supported gambling bills vetoed by former Gov. Rick Snyder, just a few days before he left office.
MiBets was told in mid-January that the reintroduction could come in February, so March is shaping up to be a key month to see if there’s still strong momentum for the legislation. Other gaming bills have resurfaced this session, but the central bill in the Wolverine State’s gambling expansion plans has yet to be filed. The bill was supported by the House by a 71-35 margin, and it passed the Senate by a 33-5 margin.
Some good news for Michigan is that the state’s 2019 legislative session doesn’t expire until the very end of the year, unlike many other states which wrap things up by mid-year. There’s also no deadline for bill introductions in either the Michigan House or Senate, another relatively unique (and positive in this context) feature for the state.
In other words, it’s far too early to read the tea leaves and start wondering if Michigan will abandon its online casino and sports betting ambitions in 2019. The legislation that failed in 2018 represented the best effort to date for bringing the state’s gaming stakeholders on the same page, but questions linger about gambling expansion’s support among the Detroit casinos. Another hurdle the bill may have to clear is the recent Trump Administration decision to release a convoluted memo that attempted to argue online gambling, if not conducted entirely intrastate, would run afoul of a 1961 law called the Wire Act.
A third complexity for Michigan this year is the influx of new state lawmakers (including a new governor), which probably requires an educational process regarding the gambling expansion plans that were hashed out in 2018. That could be taking longer thanks to the Wire Act memo.
The memo has delayed Pennsylvania’s online gambling launch.
States’ rights issue
The Department of Justice initially said that it would delay potential enforcement of the Wire Act opinion until April, but last week the federal government decided to move the non-prosecution window back to mid-June. The true reason for this is unclear, but recent preemptive court challenges against the opinion could have played a role. The January memo was widely regarded as a political stunt with the intention of spooking the payments side of online betting into staying away from the industry.
So, it’s unclear if the extension of the non-prosecution window means much of anything. An absolute worst-case scenario would be that an enforcement action is pending (the feds need more time), but it could also mean the state-level backlash against the puzzling opinion could be causing the DoJ to back off.
Michigan has so far indicated that it’s willing to call the bluff.
“I believe this was really set up to slow states like Michigan, West Virginia, others, that have began to take the lead on this,” Michigan state Rep. Brandt Iden said on a late January ICE Webinar on the Wire Act’s impact on state-sanctioned gambling. Iden sponsored the Michigan Lawful Internet Gaming Act.
“This was meant to slow us down,” he added. “There is no desire on my end to do that. If you recall, the bills that came out of the legislature had tremendous bipartisan support, veto-proof support. If we had had more time I believe we would have discussed an override. We’re going to get right back on the horse and go after [online gambling again].
Democratic Gov. Gretchen Whitmer, who was inaugurated on New Year’s Day, doesn’t have a known position on online casinos, but she did signal support for sports betting at a primary debate in July. Whitmer, a former legislator, probably would give signals to the legislature (unlike Snyder) to not deliver an online gambling bill that she would veto.