Michigan City to Crack Down on Illegal Gambling

Michigan City to Crack Down on Illegal Gambling

Michigan’s state capital of Lansing enacted an ordinance on Aug. 27 to criminalize gambling within city limits. The measure passed by a vote of 7-1 after having failed an earlier 4-1 vote on Aug. 13 due to the absence of several council members. According to city law, an ordinance must have at least five “aye” votes to be adopted.

What Does the Ordinance Say?

The new rules prohibit anyone from using his or her real property to host gambling activities, or from employing gambling equipment for the purpose of gaming or transmitting gambling information. Even knowingly frequenting gambling operations, or merely transporting someone else to a place where gambling is known to be taking place is to be considered a violation of this law.

People who fall afoul of this ordinance can receive penalties as high as a $500 fine and up to 90 days’ imprisonment. Meanwhile, gambling houses can be declared public nuisances under the language of the ordinance, with authorities able to take civil action against them to force their closure.

Controversially, people found guilty of violating the ordinance may face civil asset forfeiture. Opponents of civil forfeiture, most commonly employed in drug cases, argue that the prospect of being able to claim defendants’ personal property for their own government departments creates misaligned incentives for public servants. Third Ward Council Member Adam Hussain, who voted for the measure, commented:

“Unfortunately, these gambling operations are disproportionately affecting our impoverished neighborhoods. It’s the people who have the least to lose who are losing the most and I have a problem with any business that exploits people in that way.”

What About Poker?

The ordinance exempts from its prohibitory restrictions any “game, lottery, or other activity authorized or licensed pursuant to state law or regulation.” This includes the Michigan Lottery, casino gaming, pari-mutuel wagering and several other forms of gambling. Poker being played in licensed casino card rooms would thus be legal.

Amusement and crane games are similarly excluded from the definition of “gambling game.” However, social poker games are not mentioned at all. Several council members have said that enforcement of the ordinance will be “complaint-based,” so home poker would be safe as long as nobody complains about it.

Yet, it’s possible that overenthusiastic officers of the law may go after private poker games held in people’s own homes even without receiving any complaints. Considering that the statute penalizes merely frequenting a place where gambling is happening as well as transporting people to a place of gambling, the circle of individuals potentially targeted with misdemeanor charges could expand to include friends and acquaintances of the players rather than just the actual participants in a poker game.

The status of online poker is also unclear, but it may be covered by this new law. The definition of “gambling game” in the ordinance begins with the following text:

“Gambling game means any game played with cards, dice, equipment or a machine, including any mechanical, electromechanical or electronic device which shall include computers…”

Thus, being played in cyberspace doesn’t automatically mean that internet poker is legal. The lone voice of dissent on the Council, Fourth Ward Member Brian Jackson, explained what may happen if the authorities take enforcement of this ordinance a step too far.

“The intent is one thing,“ he said, “but that doesn’t stop a future police chief from reading the plain language and concluding that it’s illegal to have a card game at grandma’s house.”

Reasons for the Ordinance

Lansing has seen a spate of gambling-related crimes recently. In June, for instance, five women pleaded guilty for their involvement with an illegal casino that they ran out of an abandoned storefront in a shopping center. In July, eight individuals were sentenced for their roles in an illicit dogfighting ring that featured plenty of betting on the outcomes.

There are only two gambling compliance officers for the entire State of Michigan, which leaves municipalities like Lansing with very little in the way of enforcement resources. Now that Lansing has passed its own anti-gaming ordinance, it can take matters into its own hands rather than waiting for the state to jump into action.

Michigan Gambling Expansion Imminent?

Ironically, Michigan as a whole may soon see additional gambling venues open up even as the City of Lansing takes measures to cut down on real money gaming within its borders. State Representative Brandt Iden (R) was successful in passing his Lawful Internet Gaming Act through the House in June. This bill would allow the state’s three commercial casinos and 23 tribal casinos to offer online casino, poker and sportsbetting products, subject to the appropriate licensure of course.

Iden’s bill will now have to be taken up by the state Senate and approved in a floor vote before going to the governor’s office for his signature. Most observers feel that it’s just a matter of time before this happens, and they are cautiously optimistic that Michigan will become the fifth state-regulated market for real money online gaming in the United States, joining Delaware, Nevada, New Jersey and Pennsylvania.

Michigan’s Casino Market

The state of Michigan currently has three commercial casinos situated in Detroit, which generated a combined $1.4 billion in revenue last year, representing a roughly 1% improvement compared to 2016. Needless to say, the industry is considered a valuable source of income for the state, and in 2017 the casinos paid $113 million in gaming taxes, with a further $177 million in waging taxes and development agreement payments having been collected by the city of Detroit.

After languishing in the doldrums for several years, Detroit’s casino market continues to make huge strides in 2018, and in the second quarter their revenues were 3.9% higher than during the same period a year earlier. There appears to be no slow down in momentum, either, and according to the latest results,  MGM Grand Detroit, MotorCity, and Greektown Casino generated $121 million in August, or 8.1% more than the same month last year. From that tally, $18.5 million was collected by the city of Detroit as wagering taxes and development agreement payments, while $9.8 million was paid in gaming taxes to the state of Michigan.