Michigan Online Gambling Bill’Model Legislation’ For Tribal Gaming States

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When Rep. Brandt Iden took it upon himself to lead the push an online gaming bill in Michigan a couple of years ago, the job seemed monumental. As a tribal gaming country with commercial pursuits, creating legislation which satisfies all parties is odd — if not close to impossible.

“This is the first time this has gotten done in a country with both commercial and tribal interests,” Iden said. “And that is what I am most proud of.”

Tribes are involved with a few online casinos in New Jersey and Pennsylvania, too, but those landscapes do not compare well to Michigan’s. Gaming tribes in those markets operate within the commercial structure.

In Michigan, tribes have their own individual compacts with the state. The patchwork landscape most-closely resembles authorities like California, where attempts to legalize online poker have stalled for more than a decade.

To be honest, California is more complex when it comes to competing self-interests of tribes, card rooms and the horse racing industry. But Michigan’s example shows that these parties may come to the table and make concessions when mutually tempted by profits from online gambling.

“Whenever there are this many stakeholders involved in legislation it’s an arduous task, and we showed we could get it done,” Iden said. “I feel this is model laws for the nation.”

Tribal and Business casinos compromise

Iden authored H 4926, the bill that was amended by the Senate and passed by both chambers on Dec. 20, the last night of Michigan’s legislative session. It is now awaiting signature in the governor to make it law.

Iden noted that he worked closely with Sen. Mike Kowall, tribes, commercial casinos and city of Detroit throughout Thursday to make sure everybody was on the same page. The tribal and commercial gambling interests had come to an agreement the previous week.

Commercial casinos made the concession of eliminating Sec. 16 of their House-passed bill, which stated that they may continue to run internet gaming even if a change in federal law prohibited tribes from doing this.

In return, the tribes waived their sovereign immunity for online gaming, allowing all the nation to license and regulate all casinos in precisely the same manner. The tribes had yielded sovereign immunity over liquor licenses.

“We were trying to make an equal structure so everybody felt that nobody was represented differently as it related to obtaining licensure,” Iden said. “It puts them on a level playing field, which is all they ever wanted. By everyone having to apply for a permit in precisely the same way, nobody has any benefit.”

Rock City or Block City?

Iden suggested that the last-minute changes needed to appease Detroit based around concerns over cannibalization of the brick-and-mortar facilities. Those concerns, of course, haven’t materialized in the maturing NJ online casino industry. Quite the opposite, actually.

Given that casino revenue affects Detroit’s credit score — which affirms the municipal bonds it sold to return from bankruptcy — the city wanted protection against any potential cannibalization.

“Brick-and-mortar casinos are going to continue to grow because of internet gaming,” Iden said. “We have seen this in New Jersey. But we had to make this change because it’s very important to be sure Detroit can service that debt it has taken on.”

One of the Senate amendments included a hold-harmless clause, promising those properties at least $179 million in combined annual revenue.

Launch still 15 months out

The legislation stipulates that the law could take effect 90 days after the governor’s signature. The new Division of online Gaming would then have one year to”promulgate rules governing the licensing, administration, and conduct of internet gambling under this act.”

That adds up to 15 months prior to online poker could start in Michigan. However, the”within a year” wording leaves open the possibility that the branch could complete the regulations and licensing earlier.

Iden cautioned not to expect an accelerated timeline, however. The sponsor believes the 15-month moratorium is needed for all casinos to get equally ready for launch.

“In case rules are ready earlier,” he said,”I still don’t think we will roll it out until the time set in the bill so no specific interest feels slighted.”

If everything goes to plan, look for Michigan online gambling sometime in the first half of 2020.

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