Michigan Hopes Legalizing Online Gaming Will Pay Off

The door to legalizing online gaming in Michigan has swung open thanks to bills passed by the Michigan House Regulatory Reform Committee before they concluded business for the year at the end of 2017. New legislation would raise millions of dollars for the cash-strapped state by taxing Internet gaming sites instead of raising taxes on residents. The online gaming company Amaya estimates Michigan’s online gaming revenue market at around $319.6 million. Under the new regulations that gross revenue would be taxed at 10 percent and total nearly $32 million in revenue for the state each year.

Despite opposition, including objections from Native American tribes, the Regulatory Reform Committee passed the legislation by a 7-1 vote. Those against the move claim the move poses fiscal, legal and public safety risks to the state. Representatives on the committee argue Michigan residents are already taking part in off-shore online gambling through black market websites. The new laws would allow that revenue to come directly to the state. Michigan Senator Mike Kowall (R) told the Detroit News the money the state takes in could be directed toward improving infrastructure, education, healthcare and public safety and help stop the illegal off-shore market.

Michigan residents and visitors to the state could play online games of chance including table games, slot machines, and poker. Online sports betting would also become legal if the federal government removes the ban currently in place in most states. Michigan would also benefit from Internet gaming companies combining player pools from several states which would make more games available and put larger pools of money up for grabs. A wide range of online gambling is available and legal in some European countries such as the United Kingdom where the tax revenues continue to fill the vaults.

Under the legislation, casinos in Michigan operated by Native American tribes could run online gaming sites. However, several tribes have pointed out they already have the right and the new legislation would favor the casinos in Detroit. Frank Cloutier, the Saginaw Chippewa Tribal Chief says casinos have the advantage of getting an online gaming license from the state in a short amount of time. Tribes, however, face a long process when it comes to amending their compacts.

Some tribes may come to the conclusion that online gaming violates their compact agreements and could stop paying the state. According to the Detroit News, compact agreements between the State of Michigan and Native American tribes generated about $43.9 million in 2015. This revenue supports the Jobs for Michigan Investment Fund and the Michigan Economic Development Corporation.

Representative Brandt Iden (R) who is the Chair of the Regulatory Reform Committee and sponsor of the bill, says the main driver is that technology is changing business in a big way. He believes the move to legalized online gaming is inevitable and Michigan must be proactive to capitalize on the revenue stream it will generate.