Michigan Set To Become Fifth US State To Legalize Online Poker

State Representative Brandt Iden

On Thursday, Dec. 20th, the last day of the 2018 legislative session, the Michigan Senate voted in favor of online gambling bill HB 4926 by a margin of 33-5. The piece of legislation had previously been approved in the Michigan’s House, and once Gov. Rick Snyder signs off on the bill, the Wolverine State will become the nation’s fifth state to legalize online gambling within its borders.

Passage of H 4926

In 2017, State Representative Brandt Iden (photo) introduced HB 4926. In June 2018, following consultations with tribal and commercial casino operators, as well as other gambling interests, the bill then passed the House by a vote of 68-40.

Despite Iden’s optimism about HB 4926 passing before the end of the year, though, others were less convinced. Stacking up against such a scenario was a busy legislative agenda with numerous pending issues. More recently, there were just three solid days left in the legislative diary, with the last of them being the 20th, and as gaming analyst Steve Ruddock tweeted on the day:

“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.”

A flurry of activity which continued late into the evening then saw lawmakers agree on a number of amendments to the bill. Michigan State Senator Mike Kowall subsequently presented it to the legislature, which overwhelmingly voted it through by 33-5. In the early hours of Friday, the new amended bill also received a positive vote in the House, albeit by a 71-35 vote, after which it was sent directly to the governor’s desk for final approval.

Reaction to Positive News

Following the exciting news, Mike Kowall said that it was the first time that he could recall the state’s tribes and commercial casinos coming together and agreeing to a compromise. Meanwhile, Kowall also expressed his confidence that Gov. Rick Snyder wouldn’t stand in the way of the historic development, and as he stated:

“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.”

2020 Launch Date

Even if the governor signs the bill within the next week or so, Michigan is not expected to launch its regulated online poker market for another 15-months or so. This will provide sufficient time for the state to grant online gambling licenses, as well as allow Michigan’s tribal casinos to renegotiate their present compacts.

In terms of logistics, the newly-created Division of Internet Gaming, a subsidiary of the Michigan Gaming Control Board, will be responsible for receiving and granting online gaming license. They will be priced at $200,000 a piece for the first year, with their renewal fee reduced to $100,000 for subsequent years. Most license seekers are expected to form partnerships with ‘internet gaming platform providers’, which in turn will similarly be required to obtain a license, in their case set initially at $100,000, before being reduced to $50,000 per year thereafter.

In the meantime, online gambling operators will pay an 8 percent tax rate on their gross gaming revenue, which will apply to online poker, online casino games, and possibly sports betting somewhere down the line. The bill also contains a provision allowing it to form an interstate online poker agreement with other legal online gambling states.

Finally, fifty-five percent of tax revenues will go to state coffers, while thirty percent will be allocated to the city where the casino with the internet gaming license is based. Other beneficiaries include the state school fund (5%), Michigan Transportation Fund (5%), and the Michigan agriculture equine industry development fund (5%).