Michigan Legislature Passes Online Poker and Gambling Bill
It was impressive. On the last day of the 2018 legislative session, late in the day and then into the night, just days before the Christmas holiday, Michigan lawmakers passed a bill to legalize and regulate online poker and casino games.
The Lawful Internet Gaming Act traveled leaps and bounds on the night of December 20 and ultimately landed on the desk of Michigan Governor Rick Snyder. The bill requires his signature to become law, and though he has never been an avid online gaming supporter, it is believed that he will sign the bill.
This holiday surprise will allow Michigan to become the fifth state to legalize and regulate online poker in the new United States market.
If Michigan's online poker bill becomes law, there would be around 36 million people living in states that have legalized online poker. That's still less than the state of California, but could be a tipping point upon sharing liquidity.
— Brian Pempus (@brianpempus) December 21, 2018
How It Got There
Soon-to-be-former Michigan State Senator Mike Kowall was the first member of the legislature to propose an online gambling bill in 2016. He made progress through a committee but wasn’t able to push the bill to the floor for a vote.
In 2017, State Representative Brandt Iden boarded the online gambling train and introduced his own bill in the form of HB.4926. After making some changes, working with interested parties, and finding common ground amongst the tribal and commercial casino operators, he was able to put the bill up for a vote in the House in June 2018, at which point it was approved by a 68-40 vote.
Iden wasn’t finished. He continued to make optimistic statements about HB.4926. He noted that he expected it to pass before the end of the year, he had every confidence that it would pass, and most recently, “We’re close to the finish line.”
Yet and still, online poker supporters have heard it all before. States like California and New York came close multiple times, and it took Pennsylvania several years to legalize online gambling.
The reality of the situation in Michigan was that December only offered six solid days of the legislative session, which three tentative days allowed for this week – December 18, 19, and 20. And there were multiple important issues pending, ones that demanded the attention of lawmakers in December.
HB.4926 needed to pass through the Senate, and Kowall was the person to champion it, though he was on his way out the door of the legislature due to term limits. Iden needed to find the support to push it to that finish line of which he spoke.
Michigan lawmakers did meet this week, and there was chatter on December 18 and 19 that the Lawful Internet Gaming Act was in play. Reporter Steve Ruddock was on the case and tweeting up-to-the-minute updates through to December 20.
Today is the last "official" day for the Michigan Senate to pass its online gambling bill. Some chatter indicates the holdup is now political rather than stakeholder disputes.
— Steve Ruddock (@SteveRuddock) December 20, 2018
And that’s when the magic happened.
Late into the evening, lawmakers agreed on some amendments to HB.4926, such as the allocation of tax revenue, and it went to the Senate floor for a vote. Kowall took control and presented it, and it passed by an overwhelmingly positive vote of 33-5.
Voting on the online gambling now in Michigan Senate. Easily passes.The amended bill will now go back to the House for concurrence.
— Steve Ruddock (@SteveRuddock) December 21, 2018
The amended version of the bill then had to return to the House for another vote, and it happened in the wee hours of Friday morning that the House did pass it by a 71-35 vote.
MICHIGAN: Early this morning the Michigan House voted (71-35) to concur on the bill passed late last night in the senate. It’s only Gov Snyder @onetoughnerd signature away from becoming the 5th state to legalize #iPoker!!
— Poker Alliance (@ppapoker) December 21, 2018
With that, the bill was passed, and it was sent to the governor’s desk for a final signature. It is anticipated that he will sign it.
How It Happened
Matthew Kredell of Online Poker Report spoke to Kowall after the success of the bill. “It’s the first time I think in the history of Michigan that we had the tribes and commercial casinos come together and agree,” he said of the compromises reached to pass HB.4926.
Kowall spoke of his tenacity in meeting with tribal leaders and casino executives throughout the process. The new Division of Internet Gaming, which will license the online gaming entities, will work with tribes to await the amending of their state compacts so all sites can launch at the same time.
The tax on gross online gaming revenue was another issue, one that came up as late as this week. Kowall worked with the Detroit mayor and others to ensure that a certain percentage of the revenue will go to neighborhood development, something desperately needed as Detroit recovers from bankruptcy. The horse racing industry also had demands, such as a percentage of the gaming tax to be allocated for the equine industry development fund.
Now that the bill is awaiting the signature of Governor Snyder, Kowall expressed confidence that it will happen. “I’ve spoken to him directly, I’ve spoken to his chief of staff, I’ve spoken to the person who cleans the floors in his office. Everyone has said he is probably going to sign it. I’m optimistic that he’ll sign the bill, especially with Pennsylvania having gone in that direction.”
No Online Poker Until 2020
Even if the governor signs the bill before the end of 2018, online poker and other casino games likely won’t be available for players in Michigan until sometime in mid-2020. There is a 15-month wait on the launch of the sites, which provides ample time to award licenses and allow tribes to renegotiate their compacts with the state.
15 months is kinda brutal but I guess if that’s what it takes for a deal… https://t.co/yE6O3IHC6t
— Andrew Neeme (@andrewneeme) December 21, 2018
The aforementioned Division of Internet Gaming will be a subsidiary of the Michigan Gaming Control Board. The newly-created division will ultimately accept internet gaming license applications and award licenses, which will cost $200,000 for the first year and $100,000 for each subsequent year.
However, the entry of Michigan to the online poker market in America is a very positive step. Once the governor signs the bill, the process of creating the new industry in Michigan can begin.
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