HomePublicationsNewsletter ArchiveVolume 24Issue 18SPORTS BETTING: INDUSTRY REGULATORS WEIGH IN

As the commercial and tribal casino industries continue to evaluate the business opportunities that may be present post the Supreme Court’s decision striking down a federal prohibition on sports wagering, regulators that govern the industry operators have begun to evaluate how best to protect the integrity of the wagering activity.

The New York Times reported that on behalf of four state regulators, the International Center for Gaming Regulation at the University of Nevada, Las Vegas noted that “coordinated action among jurisdictions” both state and tribal, will provide the best oversight and be key to stopping illegal betting and possible corruption of the sporting events.   Furthermore, the joint statement issued by Nevada, Massachusetts, Louisiana and Michigan noted that the integrity fee proposed by the NBA and other leagues “would increase the costs of legal sports betting, siphon much-needed tax revenues away from state coffers, and increase state regulatory burdens.”

The Michigan Gaming Newsletter recently contacted Michigan Gaming Control Board Executive Director Rick Kalm for his insight on the practical implications of the recent Supreme Court decision. He stated:

“The MGCB has not received a request from a casino wishing to offer sports wagering. If and when a request is received, the agency will see whether the request is permitted under state law. The Michigan Gaming Act does not mention sports betting.

To offer Nevada-style sports wagering, Michigan law will require some changes. Sports wagering is a low-margin business, and Michigan’s current casino tax rate is nearly triple Nevada’s casino wagering tax rate. The casinos may argue Michigan’s current tax rate makes sports wagering unprofitable and uncompetitive with illegal sports betting and assert Michigan needs a tax rate similar to Nevada’s rate for sports wagering.

In Nevada, mobile sports wagering is legal.  Before mobile or internet wagering of any type can begin in Michigan, the Michigan Legislature will need to amend our state gaming law’s current requirement that a person must be present within a casino to place a wager.

Our agency is prepared to regulate sports betting if and when it comes to Michigan.”

As Mr. Kalm noted, Nevada has developed a robust system for regulation of sports wagering and many states, including Michigan, are now looking to these standards as they develop their own specific state regulations.  In advance of state agencies establishing rules and licensing standards to govern the new form of wagering, state legislatures in many states may be required to pass a law that authorizes such activities, as Mr. Kalm noted is the case for Michigan.

Mississippi is one such state that removed the restriction on wagering on an athletic event in advance of the Supreme Court’s decision.  More recently, the Mississippi Gaming Control Board has released proposed rules, which are now being studied by the industry.  Pennsylvania is another state that amended it’s law last year, and at a monthly public meeting held this week the Board authorized its staff to begin the process towards developing a proposed set of rules and standards. 

 

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