Michigan Gaming Control Board Executive Director Rick Kalm spoke to the American Bar Association and International Masters of Gaming Law Gaming Minefield Seminar last week in Las Vegas.  Speaking on a panel focused on current topics in the gaming regulatory field Mr. Kalm made several interesting observations, including:

· With respect to the prospect of Michigan offering sports wagering in the event that the Supreme Court overturns the federal law banning state laws authorizing such bets, the MGCB has informally polled the casino operators and there is interest, and there is currently legislation pending to seek to address it.  The problem in Michigan though is that there is a Constitutional amendment that limits gaming.  He noted that the MGCB believes it has the ability to authorize it as a form of casino style game in Michigan, but to get the full flavor of it we would probably have to have some form of online or Internet wagering.  He is cautiously optimistic that something will happen, but he noted that if you use the existing casino tax rate (24%) it may be completely cost prohibitive when you are talking about a sports book. Allowing online games or reducing the tax rate for online gaming would require a legislative change, which may mean a change to the gaming act, a stand-alone online gaming bill, or some combination of the two.

· As regulators they have no issues with the concept of sports wagering and would be able to regulate it well.

· Detroit is a big sports town, and casinos really benefit from the nearby sports activities with the Pistons, Red Wings, Tigers and Lions all playing in downtown Detroit.  He noted that two of the casino owners have ties (either directly or through their family) to sports teams. 

· If sports betting becomes legal, there may still be illegal activity going on for a variety of reasons.   However, there will likely be an increased effort to go after illegal operators and bookies once a legal structure is put in place, with money put aside to increase the focus and to combat such illegal activity. 

· With regard to AML compliance matters, Mr. Kalm noted that the landscape has not changed too much recently in Michigan.  The MGCB continues to receive SAR and CTR reports from the casinos, and he noted that the three operators in Detroit are all big operators who are well versed in this topic from a compliance perspective.


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