Full Coverage Of The May 4th Michigan Online Gambling Hearing

Steve Ruddock May 4, 2016 5681 Reads
Michigan online gambling hearing live coverage

US Poker will post continuous updates of today’s hearing in front of the Michigan Regulatory Reform Committee that will take place at 2 p.m. EST. The hearing will be chaired by Michigan State Senator Tory Rocca.

The hearing will be live streamed here.

The hearing has two bills on the agenda:

  • SB 889 – State Senator Mike Kowall’s online gambling expansion bill.
  • SB 890 – A companion bill to amend Michigan penal code, exempting SB 889’s gaming expansions.

What to expect

Heading into the hearing we don’t know very much.

US Poker expects the hearing to be largely informational in nature.

A vote seems unlikely today, but not completely out of the question.

Further reading

We’ve provided several links to give today’s hearing a bit of context, and explain how Michigan has gotten to this point.

The hearing 2 p.m.

Lawmakers are starting to filter into the chamber.

According to John Pappas of the PPA (he’s one of the people testifying today), Spectrum Gaming Group’s Michael Pollock is also going to testify, and he also sees regulatory experts from Amaya/PokerStars in attendance.

Senator Kowall explaining bill. One point of interest, tribes entering into the market must waive tribal sovereignty. Could be a major sticking point.

Poker Players Alliance executive director testifying. Notes PPA has 20,000 members in Michigan.

Pappas reiterates comments from recent California hearing: Online gaming expansion bills are first and foremost consumer protection bills. Pappas then shows how easy it is to access online poker sites (illegal offshore sites) on his laptop.

The live stream is showing Pappas’ demonstration in real-time; this real-world demonstration seems like a good way to present the problem to legislators.

Pappas notes no breaches of geolocation, no underage gambling, or increase in problem gambling. He also says, every day Michigan delays is another day these safeguards are not in place to protect Michigan residents.

Pappas introduces a new term, “poker tourism,” and notes the robust attendance at poker tournaments and the dollars these visitors spend.

Pappas concludes by reiterating the bill doesn’t expand gambling, as Michigan residents are already playing online.

Three representatives from Amaya Gaming are now speaking in favor of the bill.

First is Jeanne David, who runs PokerStars’ responsible gaming department.

David is explaining how Amaya and PokerStars setup their responsible gambling protocols. This is the first time (to my knowledge) an online gaming company has so eloquently laid out its responsible gaming procedures at this type of hearing.

David is now demonstrating how players can set spending and deposit limits and self-exclusion. Limits can be on stakes played or even money lost – David uses the example of $40/week, or $.50/hand at a blackjack table.

David was a solid witness, should be brought to every single one of these hearings.

Next up for Amaya is Steven Winter, director of operations. Winter is focusing on the ways they use data to identifying problem gambling behavior and detecting potential fraud.

He notes there are 900 people working in the operations department. Winter is outlining the company’s procedures to identify players, geolocate players, identify fraud (multiple accounts etc.) as well as the anti-money laundering protocols in place.

Winter is also giving strong testimony, detailing all of the security features online gaming sites have at their disposal.

Winter is now moving onto game integrity and detecting fraud, such as collusion and prohibited software. Winter now explains how human intelligence (poker players) along with the system snuff out game integrity issues like collusion or bots, and how victims are refunded by the site.

Interesting data: PokerStars deals 12 million hands of poker a day, and PokerStars gets about nine collusion complaints per day, and just three complaints of bots per day.

Next up for Amaya: Matthew Robins, director of compliance. Robins explains that online makes it more difficult to launder money because everyone leaves an “online footprint.”

This was discussed a lot several years ago, but has been somewhat lost in the shuffle as bigger issues have come to the forefront. Robins explains how they have to be in compliance with every jurisdiction’s money laundering protocols and shows a sample of how the site logs money moving from player to player.

These types of demonstrations should help ease the mind of skeptical lawmakers.

Great, but boring, testimony. What Amaya is trying to do is show lawmakers that the procedures in place are as robust as banks and other financial institutions.

First takeaway: The hearing is definitely informational in nature. If I had to guess, it feels like the bill’s sponsors went to Amaya et al. and said the concerns some members have are x, y, and z.

Representative from the governor’s office up next.

Of note, he says, Kowall has been working on online gaming for three years and meeting with potential stakeholders. This is definitely a good sign.

The governor’s representative (missed his name and title) questions the language in SB 889 that could allow players from outside of Michigan access to sites in some way, shape, or form.

There is also some concern over the partial waiver of sovereign immunity.

Michael Pollock of Spectrum Gaming Group is now testifying. He notes that the reality on the ground in Nevada, Delaware, and New Jersey should provide comfort, not concern.

Pollock is now explaining how the online gamblers in New Jersey are new customers to the casinos, notes it’s an extraordinary marketing opportunity.

Pollock is concerned about the limited number of licenses that would be available in SB 889, and intimates that the best way is to allow all licensed brick and mortar operators to apply for an online license. Senator Kowall notes the 8 licenses was sort of an arbitrary number.

When asked about how many customers a site would need to show a profit, Pollock says, “you don’t simply measure online by how much revenue you produce,” – going on to say that you measure it by its total additive benefits to the casino.

The three commercial casinos in Michigan all sent letters of neutrality in regards to SB 889.

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