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Michigan passed an omnibus gaming expansion bill last year. It legalized online poker and casinos, as well as both retail and mobile sports betting. However, a last-minute change to the bill forbade the Michigan Gaming Control Board (MGCB) from entering into agreements with equivalent organizations in other jurisdictions.
The hearing will take place at 3 p.m. local time at the Capitol Building in Lansing. Because of the COVID-19 outbreak, public seating will be very limited. However, interested parties can submit their questions, statements or testimony in writing beforehand.
Six other bills are on the agenda as well. Most of these are unrelated, save for HB4686 which would establish a process for casino gamblers to remove themselves from the self-exclusion registry.
Keeping the door open in Michigan
The bill doesn’t directly contain any provisions for how interstate poker would work, or which other states would be involved. Rather, it would simply re-open the door that the last-minute changes to last year’s bill closed.
The most important section of SB991 would add the following paragraph to those existing laws:
The board may enter into agreements with other jurisdictions, including Indian tribes, to facilitate, administer, and regulate multijurisdictional internet gaming for poker by internet gaming operators to the extent that entering into the agreement is consistent with state and federal laws and if the internet gaming under the agreement is conducted only in the United States.
It makes a few other amendments to other sections along the same lines. In all cases, however, the specifics are left to the MGCB to determine at some future date.
The mention of state and federal laws is presumably a nod to the ongoing battle over the Wire Act, which could render the question moot depending on its outcome. The Department of Justice (DOJ) believes that this federal act prohibits all interstate communication relating to gambling, but the courts have so far disagreed. Though the DOJ is unlikely to win its case, we can’t expect much movement on interstate poker until the issue receives a definitive verdict.
More interesting is the phrase “including Indian tribes.” This suggests that Sen. Curtis Hertel foresees a future in which some states have elected to allow their tribal gaming authorities to offer internet poker without the involvement of state regulators. That’s not currently on the radar anywhere, but isn’t inconceivable.
In some states, tribes have opposed efforts to legalize sports betting unless they receive exclusive rights to offer it. It’s possible that tribal internet poker could become a bargaining chip in those situations somewhere down the road.
Interstate compacts are a worry for the lottery
The reason that the original bill was changed in the first place has to do with the state’s lottery. According to Sen. Hertel, the lottery’s concern was primarily with the possibility of online casinos linking their slots jackpots with those in other states.
Such a network could potentially produce jackpots rivaling those of interstate lottery draws. The Michigan Lottery worried that this could hurt its sales. That explanation is born out by the draft rules currently under consideration by the MGCB. They contain a few provisions seemingly aimed at further curtailing the potential size of progressive slots jackpots.
In a way, that’s good news for SB991 and the possibility of interstate poker. It’s a very different product from lottery tickets, and unlikely to compete with them in any way. Whether the lottery sees it that way is the question, and it will be interesting to see whether such issues are raised at the hearing.
Michigan’s legislative session hasn’t been interrupted by the pandemic, and will continue through the end of the year. There’s still plenty of time for the bill to make its way through the House if the Senate does end up passing it. Today’s hearing will test the waters and give us a better sense of how likely that is to happen.