Social Betting Comes Front and Center in Michigan

Michigan is one of only seven states that have legalized both online sports betting and casino gambling. Interestingly, a new bill has been proposed that would legalize bets made between friends and relatives.

According to current gambling laws in Michigan, it is technically illegal for two or more friends and or relatives to engage in any form of gambling for money. That includes the casual sports wagers, participating in March Madness pools, or the Friday night poker game with the boys. By introducing SB 511, Sen. Veronica Klinefelt is seeking to legalize such activities as long as stringent restrictions are followed.

The casual betting restrictions she is seeking include:

• Bets and betting pools would be limited to 100 participants


• The maximum allowable bet would be $25


• Bet initiators would be required to participate equally


• 100% of the collected proceeds must be disbursed with no commission or rake going to bet initiators.


• The betting cannot take place in a legal gambling establishment (race track, casino, etc.)


• Wagers will only be allowed between people in an established social relationship (friends, co-workers, and relatives)


• Businesses cannot promote or advertise the betting event


• All wagering must include legitimate forms of betting or wagering

Example: Ten friends come together to form a fantasy football league. Each participant must have an established social relationship with all of the other participants. If the fee for the league is $25, each participant must pay the $25, and the entire prize pool must be distributed to one or more participants based on the established rules of the league.

Why is This Bill Being Proposed Now?

Michigan is one of the states where lawmakers have expressed concern over the rapid growth of social casino gambling. They have also been keeping an eye on the continued use by residents of illegal offshore sportsbooks and casinos.

Remember, lawmakers have already passed laws that permit residents to legally gamble online. It makes sense that these same lawmakers are obligated to protect licensed online gambling providers from the siphoning of their revenue from unlicensed sources.

The focus on social sweepstakes casinos is necessary because such operations are trying to bypass gambling laws while offering ways for customers to win real cash and prizes. That's a real no-no!

The introduction of SB 511 seeks to specifically carve out gambling between friends and relatives to remove it from the specter of social gambling. The bill makes it possible for residents to gamble legally on a social level without coming under the scrutiny of regulators.

It's anyone's guess whether or not this bill will pass. The bill is currently with the Senate Committee on Regulatory Affairs, where committee members will determine the merits of the bill before deciding if it should go to the Senate floor. If it were to eventually clear the Senate, it would be up to Gov. Gretchen Whitmer to make the final call.

For the record, several other states have already passed similar legislation. It would seem plausible that Michigan will follow suit to remove small-scale wagering from the crosshairs of state regulators.