Published: December 15, 2019

4 types of online gambling expected to be legal in Michigan soon

Four types of online gambling, including sports betting, could be operating legally in Michigan by March if Gov. Gretchen Whitmer, as expected, signs a package of bills sent to her Wednesday by the Legislature.

The Senate passed the bills by overwhelming and bipartisan votes early Wednesday afternoon. The House had already passed the bills, but had to concur with changes the Senate made to some of them before sending them on to the governor. That happened with all but one of the bills, which is expected to be sent to the governor early next year, and only deals with a penalty issue, not legalization itself.

How soon Internet gaming and sports betting would actually begin in Michigan would depend on a number of factors, including how long it takes to produce rules related to the legislation, how long licensing takes, and how soon licensed operators have technology in place, officials said.

"My hope is that by March Madness, it will be live," said state Sen. Curtis Hertel, D-East Lansing, referencing the NCAA basketball tournament.

The following types of gambling would be newly legal:

Internet gambling

  • The legislation legalizes Internet gaming, including poker, blackjack, slots, and other casino-style games.
  • Internet gambling can only be offered by existing Michigan casinos, be they Detroit casinos or tribal casinos located around the state.
  • Players must be 21 or older.
  • Casinos operating Internet gambling will be subject to a $50,000 application fee, a $100,000 initial license fee, and a $50,000 annual fee. A license is good for five years.
  • Those who supply casinos offering Internet gaming will have to be licensed and will be subject to a $5,000 application fee, a $5,000 initial license fee, and a $2,500 annual fee.
  • The legislation creates the Internet Gaming Fund and requires fees and taxes to be paid into the fund.
  • Online gaming would be taxed at between 20% and 28%, with the lowest rate applying to adjusted gross receipts below $4 million and the highest rate applying to adjusted gross receipts of $12 million or more. That tax rate is considerably higher than an earlier version of the legislation, which had a tax rate of 4% to 23%.
  • To allow for free play to encourage Internet gaming, the casinos would be able to deduct 10% from the gross receipts, which would otherwise be taxed, for the first three years, 6% in the fourth year, and 4% in the fifth year. After that, no allowance is made for free play.
  • Proceeds from the state tax on Internet gaming would be distributed as follows: 30% to the city in which the sports betting operator's casino is located, to be spent on policing and other public safety programs; 65% to the state's Internet Betting Fund, and 5% or up to $3 million annually to a fund to support and promote the horse racing industry.
  • Money from the Internet Betting Fund could be used to cover administrative costs, with $2 million allocated to support first responders, $500,000 annually to combat compulsive gambling, and the balance going to the School Aid Fund.

Read the legislation:House Bills 43114312, and 4323.

https://www.freep.com/story/news/local/michigan/detroit/2019/12/11/online-gambling-legal-michigan/4384352002/