As my colleague Earl Burton wrote a couple days ago, there has been an uptick in online poker regulation activity in a number of states in the last few months. One state mentioned in his piece was Michigan, whose online gaming effort he said “hasn’t moved beyond talking.” But last week, a Michigan legislator did finally take the formal step and introduced a bill that would legalize and regulate online poker.
It was State Senator Michael Kowall, a Republican representing District 15, who introduced Senate Bill 0203 on March 1st, a bill which would create the “Lawful Internet Gaming Act.” The bill would authorize the new division of internet gaming to grant licenses to the state’s casinos. Of course, the casinos would have to apply for said licenses and would have to pay $100,000 to do so. The licenses would have a duration of five years and would come with a fee of $200,000 for the first year and $100,000 per year after that.
Online gaming vendors – for instance, companies that might provide poker software or computer equipment for the poker operators – can also apply for separate licenses. The price tags on those licenses would be significantly less than for the operators themselves: $5,000 for the application fee, $2,500 per year, and $5,000 for the first year.
The state would tax gross gaming revenue at 10 percent.
The beginning of bill explains that legalizing and regulating online poker makes sense for Michigan for reasons most of us have been preaching all along. The internet is woven into our lives just like telephones and televisions and people like to play poker online. These people should have the chance to play behind the consumer protections of regulations:
The legislature finds that the internet has become an integral part of everyday life for a significant number of residents of this state, not only in regard to their professional lives, but also in regard to personal business and communication. Internet wagering on games of chance and games of skill is a core form of entertainment for millions of individuals worldwide. In multiple jurisdictions across the world, internet gaming is legal, regulated, and taxed, generating billions of dollars in revenue for governments.
In order to protect residents of this state who wager on games of chance or skill through the internet and to capture revenues and create jobs generated from internet gaming, it is in the best interest of this state and its citizens to regulate this activity by authorizing and establishing a secure, responsible, fair, and legal system of internet gaming that complies with the United States Department of Justice’s September 2011 opinion concerning 18 USC 1084.
The regulations actually set out in the bill are fairly run-of-the-mill. Players must be 21-years old and located in the state of Michigan, players must be permitted to self-exclude, and online gaming operators must have procedures and technologies in place to be sure that only people permitted to play can actually logon and play, as well as being able to detect and prevent cheating.
While the bill does specifically mention online poker, it also says that it is not strictly limited to online poker and that other games can be offered.
Interstate compacts in which multiple states’ player pools are combined are also permitted.
Even if the bill somehow charges through the Michigan state legislature and becomes law quickly, it still could be a long time before any online poker rooms launch in the state. The division of internet gaming would be given a year to get all the rules set (could be less time, of course) and then nobody would be allowed to offer games for 150 days after the rules are formally laid out.
