Online Gambling Bill in Michigan Passes First Committee Vote

Less than two months after Michigan legislators announced that a bill to legalize online gambling within the state had been put forth, Senate Bill 889 passed through the first committee vote on June 8.

Members of Michigan’s Senate Regulatory Reform Committee voted 8 to 1 in favor of moving SB 889 on to face consideration by the full state Senate.

Although the successful vote represents an encouraging sign for proponents of legalized online gambling, the result was never truly in doubt, as all five of the sponsors and co-sponsors behind SB 889 sit on the Senate Regulatory Reform Committee.

Along with chief sponsor Senator Mike Kowall (R-15th District), co-sponsors Senator Curtis Hertel Jr. (D-23rd District), Senator Bert Johnson (D-2nd District), Senator Marty Knollenberg (R-13th District), and Senator Rebekah Warren (D-18th District) all hold seats on the nine-member committee.

Senator Kowall first proposed SB 889 in April of this year, with the bill’s intent being to authorize the issuance of up to eight interactive gaming licenses to either commercial casino properties or tribally owned gambling enterprises located within the state. Under the provisions of SB 889’s original legislative language, licensed operators would be permitted to provide poker, table games, and slot machines, as part of comprehensive online casino platforms.

A licensing fee of $5 million would be charged to each approved operator, with that sum representing an advance against future taxes owed, and Michigan would also charge a 10 percent tax on each operator’s gross revenue.

Interestingly, as originally written, SB 889 would not limit access to online gambling services solely to residents of Michigan, or those physically located within the state. Instead, Senator Kowall’s iGaming bill would permit access to out of state residents as well.

However, as reported by industry watchdog Gambling Compliance, the exact language found in SB 889 was altered and amended before being passed by the Senate Regulatory Reform Committee. Currently, the amended version of the bill has not yet been posted to the Michigan Senate’s website, so it remains unclear which provisions within the bill have been adjusted.

The next phase in the legislative process will be a vote on the full Senate floor, but with Michigan’s legislature scheduled to adjourn on June 17 the clock may run out on SB 889. The legislature won’t resume until September, so Senator Kowall and his allies have a slim window of opportunity in terms of immediate passage.

SB 889 faces opposition from several key figures within the state, including the Michigan Attorney General’s office and members of the legislature, making it unlikely that the bill will be rushed through during the current legislative session.

Among the major players in Michigan which have aligned themselves in support of legalizing and regulating online gambling is MGM Resorts. The MGM brand is typically associated with brick and mortar casino resort properties, and indeed Michigan is home to the MGM Grand Detroit, but the company has become a forceful lobbyist within several state-level debates over online gambling.

MGM Resorts threw its considerable industry-wide weight behind another iGaming bill earlier in June, vocally supporting New York’s ongoing efforts to legalize and regulate online poker there.