We are approaching seven years since online poker first went live in Nevada. Since then, just three other states – New Jersey, Delaware, and Pennsylvania – have sprouted online poker rooms.* It’s sad, really. At least a fifth state will soon be added to that list, as Michigan Governor Gretchen Whitmer signed legislation on Friday that legalizes sports betting and online gambling, including poker.
According to the Detroit Free Press, state lawmakers are hoping that sports betting and online gambling can get underway by NCAA basketball’s March Madness, which is in, well, March. Considering the bills were just signed last week and the licensing process still needs to start, that seems like a very optimistic timeline.
There were two separate bills involved, one for internet gambling and one for sports betting. Both passed the House and Senate overwhelmingly a couple weeks ago.
Online poker, casino games
All 26 of Michigan’s casinos will be allowed to apply for licenses. The application fee is $50,000 and the initial license costs $100,000. After that, the licenses cost $50,000 per year.
For online gambling, operators will be permitted two skins. One skin can be for online poker and the other can be for casino games.
Interestingly, there was originally a clause in the legislation that would have given the Michigan Gaming Control Board the power to enter into interstate gaming compacts so that online poker liquidity could be pooled with other states. That clause was removed, according to Senator Curtis Hertel Jr. to try to shield the state lottery from the potential of losing customers to sites that featured multi-state jackpots.
Sports betting
On the sports betting side, though, Michigan can enter into agreements with other states. Guess they assume that a) there wouldn’t be as much cross-over between sports bettors and lottery players as there would be with casino players and lottery players, and b) multi-state sports betting just wouldn’t be the draw that, say, a multi-state progressive slots jackpot would be.
Most of the other sports bill details are the same as are in the online gambling bill, except that operators can only have one sports betting skin.
Tax distribution
The majority of the taxes generated from sports betting and online gambling will go to the state’s School Aid Fund. Another $2 million from each will be given to Michigan’s First Responder Presumed Coverage Fund.
Sportsbooks will be taxed 8.4 percent of adjusted gross sports betting receipts. The Detroit casinos – MotorCity, Greektown, and MGM Grand – will be levied an additional 1.25 percent tax by the city.
Online gambling taxes are tiered. On the low end, adjusted gross receipts up to $4 million are taxed at a 20 percent rate. The highest tier is 28 percent for adjusted gross receipts of $12 million or more. There are three tiers in between. The Detroit casinos must also pay that 1.25 percent tax to the city.
*West Virginia also legalized online poker in 2019, but no poker rooms have launched.