The Michigan legislature voted early Friday to legalize online gaming throughout the state. Now Michigan’s 23 tribal casinos can operate online gambling sites if they secure state authorization through their compacts. Tribes can also choose to become commercial operators through the Michigan Control Board and bypass the generally lengthy process of revising a tribal-state compact.
Applications for commercial or tribal casinos to offer online gaming cost $100,000 a piece. If approved, licenses run $200,000 for the first year and $100,000 annually thereafter.
House Bill No. 4926, known as the “lawful internet gaming act,” clarifies tribal rights in the event a governor fails to negotiate amendments to a tribal-state compact:
“This state, acting through the governor, shall, at the request of any Indian tribe, negotiate any amendments to an Indian tribe’s compact necessary to ensure compliance with this act and any applicable federal laws. If the governor fails to enter into negotiations with any Indian tribe, or fails to negotiate in good faith with respect to any request, the Indian tribe may initiate a cause of action against the governor in his or her official capacity in either state court or in federal court and obtain those remedies as authorized in 25 USC 2710(d)(7).”
One interesting aspect of Michigan’s new law is that the state will enact a synchronized launch for commercial and tribal properties. The law allots a 15-month period prior to launch to ensure all casinos and cardrooms enter the market on a playing level field.
For commercial casinos, an 8 percent tax will be collected on wagers, minus winnings paid. An additional 1.25 percent local share would be added for the commercial casinos in Detroit.
The act states: “Except for an internet gaming operator that is an Indian tribe, an internet gaming operator is subject to a tax of 8% on the gross gaming revenue received by the internet gaming operator. An internet gaming operator that is an Indian tribe is subject to the payment requirements under section 7(1)(f).”
Michigan becomes the fifth state—joining Delaware, Pennsylvania, New Jersey and Nevada—to offer online gaming.