What to know as Michigan prepares to launch online gambling and sports betting – MLive.com

Placing a bet in Michigan will soon be as easy as picking up your phone or logging onto your computer.

This week, the Michigan Gaming Control Board approved provisional licenses for 15 platform providers that aim to run online gambling and sports betting operations for the states commercial and tribal casinos.

All platform providers still have to complete additional regulatory requirements before members of the public can place their wagers, including testing the games and platforms, approve internal controls and obtain occupational licenses for some employees.

But industry experts say that process will likely move quickly now that rules setting the framework for online gaming in Michigan are on the books, as casinos and providers have been working behind the scenes with state officials for months to prepare for launch.

The expectation is we should have online sports betting ready to go on either late December or early January in Michigan, said Michael Huff, a Grand Rapids-based corporate and sports law attorney.

Online wagering imminent in Michigan as lawmakers prepare to take up licensing rules

A year in the making

Michigan residents can currently play Michigan Lottery games online. But a legislative package signed by Gov. Gretchen Whitmer last December opened up the playing field to allow Michigans commercial and tribal casinos the opportunity to provide their own online offerings, including mobile sports betting options.

In-person sportsbooks went live in March, just before COVID-19 was first detected in Michigan. But setting up rules for online gambling took more time, in part because the gaming control board had to set up an all-new framework that incorporated the licensing process, standards and regulations and penalties for noncompliance.

The board has taken applications and reviewed submissions on internal controls and branding from prospective operators, platform providers, suppliers and vendors since mid-May, and in October submitted draft administrative rules for approval.

Before the administration could begin issuing licenses, however, the rules went to the legislatures Joint Committee on Administrative Rules, or JCAR. The rules have to be before JCAR for 15 session days before going into effect unless the requirement is waived.

Last week, Michigan lawmakers on the committee signed off on waiving the 15-session day waiting period, a step industry insiders viewed as the last big hurdle to getting the system up and running.

Sen. Pete Lucido, who co-chairs the JCAR committee, told MLive ahead of the hearing he thought letting the board proceed as soon as possible - especially considering the limited in-person gaming options due to the COVID-19 pandemic - was the best route to take.

Provisional licenses approved

In a Wednesday statement, Michigan Gaming Control Board Executive Director Richard Kalm announced 15 provisional licenses for online gaming and sports betting platform providers were approved.

The official launch date for online gambling and betting in Michigan depends on how quickly platform providers can fulfill the regulatory requirements, Kalm said.

Operators and providers are allowed to launch mobile applications prior to launch, and members of the public can download them and make accounts but wagers cant be placed until providers are given the OK, Kalm said.

The platform providers ability to meet the requirements of the laws and rules will determine which entities can be licensed for launch first, he said.

Provisional licenses were issued this week to:

American Wagering, Inc. d/b/a William Hill Sports Book

Betfair Interactive US LLC d/b/a FanDuel Sportsbook

BetMGM, LLC d/b/a Roar Digital

Churchill Downs Interactive Gaming, LLC d/b/a TwinSpires

Crown MI Gaming LLC d/b/a DraftKings

GAN Nevada Inc.

Golden Nugget Online Gaming, Inc.

NYX Digital Gaming (USA), LLC

Parx Interactive Inc.

Penn Sports Interactive, LLC

PointsBet Michigan LLC

Rush Street Interactive MI, LLC

Sports Information Services Limited d/b/a Kambi

TSG Interactive US Services Limited d/b/a Fox Bet

WSI US, LLC d/b/a Wynn Sports

A huge growth opportunity

State officials and industry experts predict the launch of online wagering options will open up new markets and boost revenue, particularly as COVID-19 continues to limit in-person gambling.

Michigans three commercial casinos in Detroit are currently closed as part of a state order shutting down certain in-person business activity. Tribal casinos are not required to adhere to state orders, although two tribes voluntarily closed their gaming facilities and those that remain open are still subject to COVID-19 precautions.

The three Detroit casinos MGM, MotorCity and Greektown had been operating at 15% capacity since operators were allowed to reopen in early August. As of October, those casinos year-to-date revenue on table games and slots was $550 million, down 54.2% from the $1.2 billion in revenue reported during the first 10 months of 2019.

In other states where its already legal, the numbers show consumers are taking advantage of placing their bets online. In October, New Jersey casinos took in $338 million in total gaming revenue, 43% of which was from online gaming, and in Pennsylvania, 28% of the $320 million in total gaming revenue for October came from online gaming, Gerry Ahern, director of North American content for Gambling.com, recently told MLive.

I think those numbers bear out, at least in some respect, to what we could see here in Michigan, Ahern said.

Considering the closures, capacity limits and game postponements or cancellations, observers say in-person sports betting has performed reasonably well in Michigan so far, and they anticipate online offerings will only boost that interest.

Huff said the state of Indiana has taken about $1.6 billion in total bets since June 2018 and collected about $12.3 million in tax revenue. Once online sports betting is approved in Michigan, Huff said it could be a pretty big revenue generator.

Sports betting is something that states have viewed as a huge growth opportunity, he said.

Rules of play

Michigan officials have been watching online gaming launches in other states closely and plan to be monitoring for any possible quirks once they get the green light to launch platforms, particularly when it comes to geolocation and identity verification.

Residents who opt to place a bet online must be over the age of 21 and be located within the state of Michigan.

Under the law, an 8.4% tax on retail sports bets are collected after winnings are paid out. Taxes on internet gambling would range between 20 and 28 percent, depending on how much money a casino generates from online gambling.

Most of the tax revenue generated by online gambling will be directed to the School Aid Fund, which funds K-12 schools in Michigan. Another $4 million a year would go to a fund compensating firefighters who contract cancer due to exposure to smoke and chemicals while on the job, and other funds will be set aside to go to a compulsive gaming prevention fund.

Read more on MLive:

Online wagering imminent in Michigan as lawmakers prepare to take up licensing rules

With Michigan casinos operating at limited capacity, state officials look to move up start of online betting

Michigan poised to legalize online gambling, sports betting

Sports betting, online gambling legalized in Michigan

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What to know as Michigan prepares to launch online gambling and sports betting - MLive.com