Bipartisan legislation introduced in the state Senate today would allow tribally and commercially owned casinos to launch online gaming months before statewide regulations are expected, as a way to jumpstart lost revenue from the pandemic.
State Sen. Adam Hollier, D-Detroit, is sponsoring Senate Bill 969 with seven Democrats and two Republicans. Hollier said the main goal is to help the city of Detroit, the state and tribes in Michigan generate revenue after months of closures due to COVID-19.
“This is fundamentally about revenue,” Hollier told MiBiz. “Casino gaming is a significant revenue source for a variety of governments across the state, and is used for essential needs.”
According to the Michigan Gaming Control Board, the three Detroit casinos’ year-to-date aggregate revenue was down nearly 52 percent through May compared to the same time last year. Through May 31, the three casinos paid $24.2 million in state gaming taxes compared to $50 million from the same period last year.
Hollier’s bill would allow internet-based gaming — separate from onsite and online sports betting — until social distancing measures are “no longer necessary” in Michigan and before the state issues licenses to do so.
MGCB spokesperson Mary Kay Bean said administrative rules for online gaming are being developed, which must be completed before internet gaming can begin. The state expects to launch online gaming by early 2021 “but it could happen by late this year if all goes well during the rulemaking process,” Bean said.
“That’s five months of lost revenue we could be talking about,” Hollier said. “In my opinion, it’s a no brainer: It brings revenue here and allows people to be home and safe.”
Bean said the MGCB has not yet reviewed the bill and doesn’t have a position.
The bill would grant provisional internet gaming supplier licenses to commercial and tribal casinos. It would also allow license holders to contract with a person or tribe outside of the state to provide software that supports internet gaming. The bill was referred to the Senate Committee on Regulatory Reform, which is chaired by Sen. Aric Nesbitt, R-Lawton.
The Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, known as the Gun Lake Tribe, which operates the Gun Lake Casino, has yet to take a position on the legislation, according to spokesman James Nye.
“The Tribe is excited to offer online gaming and sports betting in the near future,” Nye said in an email to MiBiz. “As always, we look forward to working closely with the state on any gaming regulations that impact our operations.”
Gov. Gretchen Whitmer signed a bipartisan bill package in late December 2019 establishing a framework for internet gaming and onsite and online sports betting. In early 2020, some tribes began partnering with vendors to help them participate in online gaming, though others took a wait-and-see approach.
Previous estimates by the Senate Fiscal Agency showed sports betting and iGaming could raise between $15 million and $40 million annually for the School Aid Fund.
Last month, the MGCB began accepting online gaming supplier licensing forms, a first step before the state could issue provisional licenses. Last week, the MGCB issued minimum reopening guidelines for the Detroit casinos, which remain closed until permitted to reopen by Whitmer. As of mid June, most of Michigan tribally operated casinos had reopened with safety precautions, including Gun Lake Casino south of Wayland, FireKeepers Casino near Battle Creek and Little River Casino near Manistee.
Hollier acknowledged that the years-long debate over online gambling was “obviously complicated and hard fought. I appreciate the work done in this space, but it happened in a different world” pre-COVID-19, he said.
MiBiz Editor Joe Boomgaard contributed to this report.
EDITOR’S NOTE: This story has been updated with comment from the Gun Lake Tribe.