Internet Gaming

On Wednesday, the Senate Regulatory Reform Committee held a hearing on Senate Bill 889(“SB 889”), a bill seeking to legalize, regulate and tax Internet gaming within Michigan.  Notably Senator Mike Kowall (R-White Lake), the bill’s sponsor, claimed the passage of the bill could create 22,000 jobs for Michigan.  The “Lawful Internet Gaming Act” was introduced by Sen. Kowall on April 14, 2016, and seeks to legalize Internet gaming while specifically prohibiting wagering on any professional or amateur sporting event unless otherwise legal pursuant to state and federal law. 

During Wednesday’s Committee hearing, testimony was heard by, among others, John Pappas of the Poker Player’s Alliance who estimates that the bill could generate $40 million in revenue and an increased tourism interest in the state.

In addition, Dave Murley, Deputy Director of the MGCB testified that the Governor’s office has not taken an official position on the bill and that the bill has not been evaluated against Michigan’s constitutional prohibition against expanded gambling in the state. All three of Detroit’s casinos remain neutral on the bill, but did not provide testimony during the hearing.

Under the SB 889, an Internet “casino” would be required to apply for licensure to a proposed division of Internet gaming within the Michigan Gaming Control Board. If granted, a license would be granted for a period of five (5) years. Eligible licensees include existing Michigan casino licensees and federally recognized Michigan Indian Tribes.  The bill proposes a maximum of eight (8) licenses, each required to pay a $5,000,000 license fee with a 10% tax on gross gaming revenues.

In addition, the bill includes age verification restricted to 21 years of age and older.  

 Horse Racing

Two competing bills, which seek to amend the Horse Racing Law of 1995, have been referred to the House Committee on Agriculture

On Tuesday, May 10, 2016 , the Michigan Senate passed SB 504, a bill seeking to amend the Horse Racing Law of 1995 to permit, among other revisions and amendments, the Michigan Gaming Control Board to promulgate rules for the implementation of “Advance Deposit Wagering”. In addition, it provides for simulcast–only (without live racing) options for tracks, if specific conditions are met.

On Tuesday, May 3, Rep. Bumstead (R-Newaygo) introduced HB 5600, a competing bill that also seeks to revise the Horse Racing Law of 1995. This bill does not contemplate the addition of ADW, or simulcast-only operations, and it largely seeks to license and regulate Certified Horsemen’s Organizations within the state.

Both bills also provide for the reduction of the total number of race days required for a track license, and also seek to modify the allocation of simulcast purses to be racetrack specific.

 

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