On Wednesday the Michigan Senate Regulatory Reform Committee held a short but very productive hearing regarding online gambling. The committee passed a recently introduced iGaming bill, SB 889, by a vote of 8-1.
The bill, which materialized out of virtually nowhere in April, now moves to the floor for consideration, and could come up for a vote by the full Senate in the coming weeks.
However, the potential Senate floor vote will likely have to wait until the legislature passes a budget.
Nothing happens until the budget is passed
According to the bill’s sponsor, State Senator Mike Kowall, everything else is put on hold at this time of year until the legislature and the governor pass the state budget.
The good news is the budget is expected to be finalized in the next week to two weeks according to a recent interview with Governor Rick Snyder.
The bad news is, any delay beyond that could spell the end of online gambling for this year, as the legislature is slated to go home for its summer recess by the end of June. All remaining bills will become inactive at that time.
The really bad news is Michigan is dealing with a crisis in Flint, as well as ongoing criticism of the state of its schools.
Adequate funding is desperately needed on both fronts, and penny-pinching on either of these issues could cause the budget talks to drag on long past the top-end estimate of two weeks Snyder put forth.
How SB 889 got to this point
The speed with which Michigan has moved on online gambling is impressive, and the state is already well ahead of several other jursidictions that have been discussing online gambling bills for several years.
Following the bill’s introduction, an informational hearing was held in the Regulatory Reform Committee on May 4. At this hearing, we learned Kowall and others have been working on online gambling behind the scenes for three years.
According to Kowall, he has all the state’s various casino stakeholders on board, and we learned that Amaya (PokerStars) is likely a driving force behind this year’s efforts to pass an online gambling bill, as three representatives from the company spoke at the May 4 hearing.
Also working in Michigan’s favor is the presence of MGM Resorts (MGM Detroit Casino), as the company is one of the most vocal advocates for online gambling legalization in the land-based casino industry. Furthermore, based on some of its recent moves, MGM also appears to be positioning itself to be one of the key players in the U.S. online gaming market.
Finally, there is also the boost online gambling is likely getting from the Michigan Lottery, which began selling tickets online in 2014, a decision that has been very well received and brought new revenue to the state.
A slightly modified version of SB 889
According to GamblingCompliance’s Chris Krafcik, the bill passed by the committee was a substitute bill:
A substitute version of #MI SB 889 will be considered today, per bill sponsor's office. Bill, if passed, would go to Senate floor. More TK.
— Chris Krafcik (@CKrafcik) June 8, 2016
The changes to SB 889 have yet to be made public, but likely have to do with the constitutional issues Kowall discussed with OnlinePokerReport.com last month. According to Kowall, the bill would need to be amended to fix “some constitutional issues with the tribes and the tribal compacts.”
Less likely, but still a possibility, are modifications to the number of available licenses, a number that currently stands at eight. In the same interview with OPR, Kowall said the limiting of online gambling licenses to eight was a “stepping off point,” and he’d be open to changing it down the road.