Michigan Online Sports Betting

If we have learned anything from Pennsylvania, it’s that persistence is key, and no other state legislature has been more persistent than Michigan when it comes to trying to get online gaming regulated. With the United States Supreme Court’s ruling on that PASPA, a 30 year old law that outlawed sports betting everywhere in the US besides Nevada, there is even more incentive for states to expand online gaming beyond just poker and casino games, and into sports wagering. There were high hopes for Michigan to be the next state to join the online sports betting world, but those dreams died when Governor Rick Snyder vetoed the comprehensive online gaming bill as his last action in office. Michigan has been working towards online gaming regulation for four years, and despite Snyder’s disappointing decision to veto the 2018 effort, 2019 is a chance for Michigan to right the ship

Michigan Sports Betting Legislative Landscape

2018 seemed like it was going to be the year that Michigan would finally pass online gaming and sports betting legislation. In the final hours of the 2018 legislative year, Rep Brandt Iden finally got his “lawful internet gaming act” up for a vote. H4926, which would legalize online poker, casino games, slots and lay the groundwork for sports betting, easily passed in the Senate with a 33-5 vote. The bill quickly moved to the House and three hours later easily passed 71-35.

The only thing standing between legal, safe and regulated online gaming was a signature from the lame duck Governor, Rick Snyder. As his last act in office, Snyder vetoed H4926 along with 39 other bills that arrived on his desk for approval. With that veto, online gaming was dead for 2018.

​Despite the disappointing news, Representative Iden is not planning on backing down anytime soon. When asked about the veto, Iden said “We had no idea this was coming. We had all the stakeholders supportive of the package and we had alleviated any concern, so this is a very surprising outcome.” Iden expressed that he believed the reason behind the veto was the unfounded potential revenue shift from the state run lottery to internet gaming. “I think its unfair because you’re taking a state entity like the lottery and trying to compare it to the free-market system of other online gaming platforms.” He also points out that in New Jersey, revenue for the lottery has increased since adding online gaming.

Iden fully plans on reintroducing the bill early in 2019 in the same form as the bill that had so much support in 2018 with the addition of regulatory framework for sports betting. The 2018 version only laid the groundwork for future sports betting stating “The division may permit internet gaming operators licensed by the division to accept internet wagers under this act on any amateur professional sports event or contest.” The 2019 version will be more detailed on what license holders can offer when it comes to sports betting.

What to expect in 2019

With Rep Iden planning on reintroducing the same bill with a few modifications, lets take a look at the 2018 bill:

  • License applications would cost $100,000 and if approved the license would be $200,000 for the first year and reduce to $100,000 every year after.
  • Tax rate is set at 8% with an addition 1.25% for Detroit based casinos.
  • Expanded regulatory framework for Sports betting.
  • Bill would fully license, regulate and legalize all games available in a brick and mortar casino such as poker and casino games such as blackjack, slots and roulette.
  • Would allow for the states 23 tribal casinos to offer online gambling.
  • Requires gaming servers to be physically located in a Michigan Casino
  • There would be at least a 1 year waiting period for launch after approval.

Potential Hurdles for 2019

Despite overwhelming support in 2018, there are some potential roadblocks that could make passing legislation more difficult in 2019:

  • While Governor Snyder leaving office is obviously a step in the right direction, we still don’t know what the new Governor, Gretchen Whitmer’s opinion will be on online gambling. Rep Iden believes Whitmer will support online gaming legislation, but possibly with some modifications such as more tax revenue going to schools or a higher tax rate overall.
  • With a lot of turnover in both the Senate and House, it is unsure that the same level of support will be there in 2019.
  • Iden expects that with new legislators taking office, that it will take some time to educate them on the bill. This may delay the process but Iden has stated that he is “fully prepared to do so and confident we will have a successful 2019.”

PASPA

In May 2018, the United States Supreme Court decided that PASPA,a 30 year old law that outlawed sports betting outside of Nevada, was unconstitutional. This decisions left the power to the states to decide of they would like to offer sports betting. Since this decision, eight states have passed legislation legalizing sports betting within their borders.

Michigan’s Betting History

Until 1972, horse racing was the only form of gambling in Michigan, but that changed when charity gambling and lottery were added. In the early 1980’s, Native American tribes began offering high stakes bingo halls and proved to be immensely popular. The tribes went on to negotiate deals with the state for class 2 gaming licenses that would allow them to offer electronic bingo and lottery games. There were some legal battles, but in the end the state granted the licenses.

Until 1996, if residents of Michigan wanted to gamble, they had to cross the border into Canada. State legislators saw the potential for much needed tax revenue and legislation was passed to open 3 casinos in downtown Detroit. It wasn’t until 1999 that the first casino opened their doors.

While the non-native tribe casinos were thriving, the Native American tribes felt slighted and wanted in on the action. After a slew of legal battles, the case eventually wound up in front of the US supreme court, ending with the tribes being granted licenses to offer table games and slots. There are now over 19 tribal casinos run by 12 different tribes.

In 1999, with the state fearing that online gambling could take away revenue from the new casinos in Detroit, a piece of legislation was passed banning all forms of online gambling. This was short lived as the law was reversed later that year.

With 25 casinos spread throughout the state, Michigan is clearly not averse to gambling. It only makes sense to take the next step into online gambling and sports betting.

Frequently Asked Questions

Is sports betting legal in Michigan?

No, but we are hopeful that new legislation will pass in 2019.

Where will I be able to place sports bets should it become legal?

Michigan plans on having the state’s 25 casinos handle sports wagers.

What types of bets will I be able to place?

If Michigan follows in the footsteps of other established states such as New Jersey and Nevada, your options will include moneyline bets, spread, over/under, prop bets, and parlays.

When sports betting legislation is passed, how long until I can place my first bet?

If Michigan passes the 2018 bill in its same form, there will be a one year waiting period before casinos can begin accepting sports wagers. This is an effort to keep an even playing field for all Michigan casinos.

    

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