In the "we didn't see this coming" category, Michigan is now considering whether to legalize online poker and casino games.
OnlinePokerReport.com reported on Friday that State Senator Mike Kowall has introduced legislation that will regulate both activities.
The bill is relatively straightforward but does include a provision that could be a game changer for future states considering iPoker regulation.
Bill Will Grant 8 Licenses Total
On Thursday, Senator Kowall filed SB 889, simply titled the "Lawful Internet Gaming Act."
The bill points to the September 2011 opinion issued by the U.S. Department of Justice regarding the Wire Act as giving the state the freedom to pursue the matter.
Like most other bills, the bill's purpose is to create a safe playing environment for those wishing to gamble online while generating both jobs and revenue for the state.
The bill will authorize both online poker and casino games and will be available to players 21 and older. Only Michigan-based casinos and tribal casinos will be allowed to apply for a license.
SB 889 will limit the total number of licenses to eight. Each license holder will pay a nonrefundable fee of $100,000 plus a $5 million licensing fee that will be considered a prepayment towards future taxes.
Providers will be taxed at the rate of 10% of gross gaming revenue. Licenses will be good for 5 years with options to renew to five-year intervals.
The bill does not contain a bad actor clause.
Players Outside of Michigan May Get to Play
There is an interesting clause in the bill that may allow players from outside the state to login and play.
According to the bill, "Notwithstanding anything else in this act, a wager may be accepted from an individual who is not physically present in this state if the division determines that the wager is not inconsistent with federal law or the law of the jurisdiction, including any foreign nation, in which the individual is located or that the wagering is conducted under a multijurisdictional agreement to which this state is a party that is not inconsistent with federal law.”
In layman's terms, if online gambling is legal in a particular locality or state, those players may be able to login and play on Michigan sites.
This opens the door for both interstate and international compacts as well. For example, PokerStars may not be forced to ring fence the ROW players from Michigan.
However, in the short term, we expect that this will simply allow for an easier sharing of player pools from other regulated U.S. states.
This clause could be a game changer for future states considering this type of legislation, opening the door for player sharing in any state or country that has legalized and regulated online gambling.
Michigan a Favorable Climate for iPoker Expansion
Michigan is one state that, based on its recent past, could be a strong contender to join the regulated U.S. market.
It launched its own online lottery site in 2015 and by April were generating over $500,000 a day in sales. Michigan expects to bring in over $480 million from online lottery sales by 2023.
In addition, Michigan is another state looking into the regulation of Daily Fantasy Sports. Michigan lawmakers are familiar with online gambling and have already seen the positive impact it has had on the state in terms of revenue.
Now they have the chance to take the next step and regulate online poker and casinos games. The bill's first stop is the Committee for Regulatory Reform.
It's too early to estimate the bill's chances of success but don't be surprised to see some type of action taken on the bill by Mid-May