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Online Gambling and Tribal Gambling in the Same Sphere?

December 27, 2018

For the first time in US history, online and tribal gambling options will try to co-exist in the same state. That state looks like it will be Michigan. 

In the wee hours of the morning on the final day of the 2018 legislative session, the Michigan Senate and House both managed to pass bill H-4926, The bill was written and sponsored by Rep. Brandt Iden. 

The first thing this bill does is legalize online poker and online casinos games throughout the state. There's also a one line provision that allows a newly formed division that reports to the Michigan Gaming Control Board (MGCB) to decide the fate of sports betting for residents in Michigan. It's worth noting this provision does not mandate the legalization of online sports gambling, it only provides the pathway to doing so. 

The bill is now on the way to the desk of Gov. Rick Snyder. With no clear indication of what he will do, it is expected he will eventually pen his name to the bill. 

The bill addresses the proposed tax structure for revenues. There will be a very reasonable tax assessment of 9.25% on all online gambling activities, including poker, casino gambling and sports betting. The first 1.25% of the assessment will go to the City of Detroit for rebuilding efforts. The remaining 8% will go to the state coffers to be allocated as needed throughout the state. 

There is an interesting caveat in the tax structure. The 1.25% tax will not be applicable to tribal gambling concerns. Tribal gambling providers will be allowed to apply for a sports betting license under commercial licensing rules. The exemption seems to be an effort to placate Tribal gambling providers that have long existed within the state. Other than the exemption, the bill seeks to find a level playing field for all gambling operations around the state. Iden stated he was looking for a solution that would benefit everyone and get things up and running as soon as possible. 

If there is any downside to the legalization of online gambling in Michigan, it would have to be the 15 month moratorium placed on the startup of any online gambling operations. This should give all parties concerned ample opportunity to get everything in place for a launch sometime in 2020. Until then, Michigan residents will just have to mark their calendars and wait until they get the go ahead.

 


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