This year, Michigan quite surprisingly joined the small company of states that are considering the legalization and regulation of online poker and other casino games within their borders. State Sen. Mike Kowall introduced SB 889 or the Lawful Internet Gaming Act and even more surprisingly the legislator said earlier this week that Michigan is among the US states most likely to see online poker legalized by the end of the year.
Generally speaking, SB 889 provides for up to eight online gaming licenses to be issued to existing casino licensees or to federally recognized Michigan Indian tribes that manage a gambling venue in the state. Any interested party would have to pay an application fee of $100,000 and a license fee of $5 million in order to be able to provide Internet gambling options. When issued, a license would be valid for a period of 5 years and could be renewed for further five-year periods. Under the bill, all licensees would have to pay the state a 10% tax on the revenue generated by Internet gambling operations.
Dave Biswas, Legislative Director to Sen. Kowall, has recently explained that after the Senate hearing for the Lawful Internet Gaming Act that took place earlier in May, certain amendments to the proposed legislation will now have to be introduced, with those being mainly technical ones. Then, another hearing is to take place, probably in the weeks to come. The bill will then go to the State Senate and later on to the House.
According to industry experts, there are certain issues that may hamper the bill’s quick passage into law. For instance, under the Michigan Constitution, gambling expansion needs to be approved by the public. It is true that online poker will certainly be welcomed by a great number of the state’s residents but a public ballot will delay the proposed legislation’s coming into effect.
The tribe’s participation into the potential provision of online poker within the state may also turn into a key issue. As it is known, Indian tribes are sovereign entities but they would likely have to waive their immunity in order to be able to provide online gambling services. And they would not be particularly happy with this.
On the other hand, they may consider the legalization and regulation of online poker a breach of their compacts with the state. In other words, tribes may decide to withhold revenue share payments, agreed upon signing their agreements with the state.
It could not be said whether Michigan would legalize online poker by the end of the year but the state is believed to be perfectly capable of legalizing and regulating online poker market in a proper manner.
