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Michigan Regulator Says State ‘About 30%’ Done With Online Gambling Rules

Retail sportsbooks will open ahead of March Madness, but Michigan casino regulators are also working quickly on rules for online gambling.




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Michigan is on the verge of retail sports betting, expected to kick off as early as this week or next week and in time for March Madness, an immensely popular wagering event that begins March 17.

In December, the state of Michigan legalized online/mobile sports betting and online casino gaming while putting in place a tax rate for sports betting that the Detroit casinos are happy with. The casinos technically could have moved forward to debut retail-only sports betting in the absence of a new state law after PASPA fell before the U.S. Supreme Court in 2018. It would have meant, however, using the same tax rate that applies to slots and table games, which wasn’t attractive. They waited for a new law to be enacted in Lansing.

Richard Kalm, the executive director of the Michigan Gaming Control Board, spoke with WWJ NewsRadio 950’s Rob St. Mary in Michigan last week and provided an update on where regulation of online/mobile wagering stands. It had already been known earlier this year that online/mobile wagering, both on sports and casino, wouldn’t begin in 2020, but Kalm provided more details on the process. According to Kalm, the draft rules and regulations are quickly coming together.

Nearly a third of the way

Writing the initial draft of the rules and regulations doesn’t account for the bulk of the timeline for legal online gambling to be available to consumers in the Wolverine State.

“We’re probably about 30% through a proposed set of rules for the activity online, both sports and internet [casino]  games,” Kalm said. “When we get a proposed rule set, before we even submit that rule set to the state for all the approvals necessary, we’re going to reach out and send those all out to the tribal casinos and commercial casinos and get feedback. Then we’ll do the modifications. It’s quite an involved process. We anticipate sending those out in the next 30 or so days.”

Michigan is home to more than 20 tribal casinos in addition to the three Detroit commercial casinos. Tribal retail casino gambling is regulated by the federal government, but the tribes’ online gambling operations will be conducted under the regulations from the MGCB.

Despite the rules and regulations almost being ready to make their way to the casinos for review, the entire process is still expected to take until early 2021.

“There are several steps we go through with the state,” Kalm explained. “It usually takes about a year, by the time we draft and submit, to the time those rules are actually approved. We have to send them to the legislature, to the Joint Committee on Administrative Rules. We have to send them to the Office of Regulatory Reform, where they look at the rules and make sure they’re written properly and in the proper format.

“They have the effect of law on the operations of these casinos. It’s a cumbersome process. We have to do a regulatory and fiscal impact statement for each rule, to see if each rule is going to cost the state money or if it’s going to make the state money. It’s very involved.”

Delays are possible, but not likely

Kalm cautioned that not much can happen to speed up the process, but there is a real possibility that a delay could occur. He doesn’t expect there to be any hiccups, however, given the state’s long and successful history with regulating gambling. In 2019, the Detroit casino gambling market celebrated its 20th birthday.

“We don’t expect to be taking bets online until probably this time February of next year, at least,” Kalm told WWJ NewsRadio 950. “A few things can speed it up, but not a lot. Several things can slow it down. If we don’t get buy-in from the tribes or commercial casinos, we’d be going back to try to modify the rules. The casinos in the past have been pretty good about this, they understand why we’re doing certain things, and they’re used to being regulated. So we’ll just see what happens.”

It helps that Michigan, which considered online gambling for several years before finally enacting legislation, now has multiple states to look at as models. Kalm said the MGCB is looking at New Jersey, Pennsylvania, and Indiana when crafting Michigan’s regulations. All three states have online/mobile sportsbooks, with both Pennsylvania and New Jersey having online casino as well.

Michigan will remain at a competitive disadvantage to neighboring Indiana until it kicks off online/mobile. Nearly 90% of the sports betting handle in both Pennsylvania and New Jersey is now generated via the internet, and that figure was more than 72% in Indiana in January.