Michigan Senate Gives the Nod to Proposed Online Gambling Legalization Measure

Late on Thursday, the Michigan Senate gave the green light to the proposed legislation which would result in the expansion of the legal gambling market in the state. The approved piece of legislation would allow online gambling in Detroit and local tribal casinos.

The legislation in question got the nod from the upper chamber of the Senate in a series of bipartisan votes at the end of the session. The decision is to now send the measure back to the House for final approval. The amendments made by the Michigan Senate would make sure that contributions of at least $179 million would continue to be added to Detroit coffers on an annual basis even in case that the three brick-and-mortar casinos in the city are visited by fewer players.

In addition, if the measure gets a final approval from the House, it will make Michigan the fifth US state which offers legal online gambling services, along with New Jersey, Delaware, Nevada and Pennsylvania.

The proposed piece of legislation would make sure that an 8% tax is imposed on local online gambling operations, with this tax being considerably smaller than the 19% tax rate which is valid for retail casino gambling in Michigan to date. According to the proposed bill, 55% of the new online gambling revenue would be redirected to the Michigan gaming fund, 30% of it would go to the city of Detroit, and the rest of the tax revenue would be contributed as funding to state’s roads, schools and horse racing industry.

As far as the online gambling tax revenue from tribal casinos is concerned, it would be allocated differently. A total of 75% of this revenue is to be distributed to the state’s gaming fund, while the Michigan Strategic Fund will receive the remaining 25% to continue its operation related to the area’s economic development.

Online Sports Betting Could Also Be Added

Despite the fact that the proposed measure would not directly greenlight online sports betting, which became possible under the US Supreme Court’s ruling in May, but it is believed that it would be of great help to see such operations up and running in the state of Michigan, too. Under the provisions of the bill, a division of online gambling is set to be established under the Michigan Gaming Control Board that would be able to allow state-based licensed casinos to start accepting online wagers on professional or amateur sporting events or contests.

The Senate voted 33-5 to approve the main measure. In case that the House gives the nod to the proposal, Michigan casinos which would offer online gambling would be required to make sure that their customers are at least 21 years old. They would also have to limit online gambling participation to the state only, or to another US jurisdiction which has already legalized online gambling.

In addition, casinos would be allowed to apply for a special online gaming license, which would cost a $100,000 application fee, an initial license fee of $200,000, as well as an annual renewal fee of $100,000. Licenses for online gaming platform providers would cost them an application fee of $100,000, and an annual renewal fee of $50,000.

As far as tribal casinos are concerned, local Indian Tries which run such venues would be able to seek an amendment to their compact agreements with the state in order to include online gambling to their casino offerings.

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