Michigan Legislators Hold Hearing to Discuss Online Gambling Regulation

While states like California and Pennsylvania continue to dominate the discussion when it comes to the legalization of online gambling, Michigan has recently emerged as a dark horse candidate in that regard.

Members of the Michigan Senate’s Regulatory Reform Committee convened a hearing on May 4 to discuss the state’s pending proposal to legalize and regulate the online gambling industry.

Officially known as Senate Bill 889, the proposal, which was introduced in April, was sponsored by Senator Mike Kowall and co-sponsored by four of his colleagues from the Senate. Representing the state’s first public foray into the debate over government-authorized online gambling, political watchdogs in Michigan looked to the May 4 hearing as the first opportunity to gauge the level of support currently backing SB-889.

The content of SB-889’s legislative language proposes to permit up to eight interactive gaming licenses to be awarded, with both commercially operated casinos and tribally owned establishments in Michigan eligible to apply. Operators would be allowed to run online poker games, along with slots, table games, and other online casino offerings.

Crucially, SB-889 would not limit access to Michigan’s online gambling platforms to residents of the state, and under the bill’s current construction, out of state residents would be able to register for accounts and play for real money.

The state would charge a licensure fee of $5 million as an advance against expected taxes owed, and a 10 percent tax on gross revenue would be imposed on all operators.

During much of the 90-minute hearing to discuss SB-889, with six of the committee’s nine members in attendance, the atmosphere was subdued and straightforward. Senator Kowall was joined by co-sponsor Senator Rebekah Warren – along with committee Chairman Tory Rocca, Vice Chairman Rick Jones, and Senators Peter MacGregor and Joe Hune. According to firsthand reports from the floor, the committee members were generally reserved and contemplative during the hearing, seldom asking direct questions while preferring to let witnesses deliver their testimonies.

Among the witnesses to make statements during the hearing were John Pappas, executive director of the Poker Players Alliance, three executives from PokerStars’ owner Amaya, deputy director of the Michigan Gaming Control Board David Murley, and Michael Pollock, the managing director of Spectrum Gaming Group.

Representatives for three of Michigan’s casino properties – MGM Grand Detroit, Greektown Casino and Hotel, and Motor City Casino – also read prepared statements into the record.

Each of these casinos officially offered a stance of “neutral” on SB-889. This was especially curious on the part of MGM, as the casino corporation has previously positioned itself as a vocal advocate of online gambling legalization.

Revelations from the hearing included the fact that Senator Kowall has been quietly lobbying colleagues behind the scenes for the last three years. With Michigan standing as a relative latecomer to the online gambling discussion, at least publicly, learning that the state has what amounts to a three-year head start was an encouraging sign for supporters of SB-889.

No opponents of SB-889 made themselves known during the hearing, which was largely constructed to provide introductory information to committee members. Amaya’s heavy presence at the hearing confirmed to most observers that PokerStars’ parent company has been a prime mover during the lobbying process.

The state’s Native American tribes, on the other hand, were conspicuously absent from the proceedings, offering a stark contrast to California, where input from the tribal leaders there has closely shaped (and some would say scuttled) pending online poker legislation.

SB-889 remains in the first phases of the legislative process at this point, with a proper committee vote still only on the horizon, but based on the generally cooperative atmosphere at the most recent hearing, Michigan may be primed to push the bill along in the near future.