Important MI Notes
- MI poker players can play legally at offshore poker rooms
- Decent chance of passing online gambling this year
- Michigan is a gambling friendly state offering several options
- Horse Racing is covered under the Horse Racing Law of 1995
- Online Poker is deemed legal on a federal level
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“Reviewed by Chuck Humphrey – 49 year Gaming Law Practitioner”
Michigan law does not specifically prohibit the use of Internet to violate its gambling laws, but at the same time does not sanction online gambling; including online poker. Playing online poker is not specifically made illegal under federal law. The UIGEA allows intrastate online gambling (excluding sports betting) provided the state has passed specific legislation to this effect.
Future Outlook of Online Poker in Michigan – Estimated date of legalization: 2017-2018
The following graph tracks our expected legislation of online poker in Michigan on a state law level. It is currently already legal on a Federal level. This graph monitors the current rise or fall of expected legalization.
The Lawful Internet Gaming Act, proposed by State Senator Mike Kowall of...
Last year's efforts to introduce online gambling to Michigan were dashed when...
Senator Mike Kowall introduced a bill, SB 889, on April 15, 2016 that would legalize online poker and casino games. It passed the Senate Regulatory Reform Committee on June 8, 2016 by a 8-1 vote. The bill then went to the Senate for a potential vote but it didn’t receive one. State lawmakers continue to look at this bill and there appears to be a fairly good chance of it getting passed sometime this year.
A report from Mlive.com [B] stated that in June 2013 the Michigan Lottery has suspended its plans to sell lottery tickets online on the grounds that, “it would promote gambling problems and hurt brick-and-mortar businesses that sell tickets”. However, this plan has changed. The sale of online lottery tickets went live in November 2014, and brick-and-mortar sales have increased by 3-4% since then.
Chapter 432 [C] of the Michigan Compiled Laws deals with the gaming. Casino gambling is covered by the Michigan Gaming Control and Revenue Act (1996), Compulsive Gaming Prevention Act (1997), Casino Interest Registration Act (1997), and Public Act 185 (2000). Native Indian casinos are not covered by these acts.
Section 432.218 [D] of the Michigan Gaming Control and Revenue Act spells out the main violations and the punishments for the same. It says:
(1) A person is guilty of a felony punishable by imprisonment for not more than 10 years or a fine of not more than $100,000.00, or both, and shall be barred from receiving or maintaining a [gaming] license for doing any of the following:
(a) Conducting a gambling operation where wagering is used or to be used without a license issued by the board.
(b) Conducting a gambling operation where wagering is permitted other than in the manner specified in section 9.
(c) Knowingly making a false statement on an application for any license provided in this act or a written document provided under oath in support of a proposal for a development agreement.
(d) Knowingly providing false testimony to the board or its authorized representative while under oath.
(e) Wilfully failing to report, pay, or truthfully account for any license fee or tax imposed by this act or wilfully attempt in any way to evade or defeat the license fee, tax, or payment. A person convicted under this subsection shall also be subject to a penalty of 3 times the amount of the licensee fee or tax not paid.
(f) Making a political contribution in violation of section 7b of this act.
Horse racing is covered under the Horse Racing Law of 1995, Public Act 279 as spelt out in MCL 431.301 to 431.336. Lottery games are covered under the McCauley-Traxler-Law-Bowman-McNeely Lottery Act, Public Act 239 as spelt out in MCL 432.1 to 432.47. Bingo is covered under the Traxler-McCauley-Law-Bowman Bingo Act, Public Act 382 as spelt out in MCL 432.101 to 432.120. Gambling on Native American land is covered under the Indian Gaming Regulatory Act, Public Law 100-497, 102 Stat. 2467. Recreational activities that can be construed as gambling are covered under sections 303a, 310a, 310b, 372, and 375 of the Michigan Penal Code, Public Act 328 as spelt out in MCL 750.303a, 750.310a, 750.310b, 750.372, and 750.375.
History of Gambling in Michigan
Land Based Poker in Michigan
Michigan statute allows home poker by specific exclusion from the definition of “gambling game” under section 432.202(v). The exclusion states, “…but does not include games played with cards in private homes or residences in which no person makes money for operating the game, except as a player.”
Michigan law also allows poker at a senior citizen housing facility subject to certain conditions under section 750.303(a). The main conditions are (a) The poker (or other card games) is conducted solely for the amusement and recreation of the members and not conducted for fund-raising. (b) The poker games are conducted after 9 a.m. and before midnight. (c) The participating players bet not more than 25 cents per bet. (d) The winnings from 1 hand of cards do not exceed $5.00. (e) Except for winnings, revenue generated from the activity is used for reasonable expenses incurred in conducting the games. Reasonable expenses specifically exclude compensation to persons.
Michigan allows non-profit charities to conduct poker tournaments in which cash prizes can be offered to winners. For these tournaments the charity must obtain a Millionaire Party license from the Michigan Gaming Control Board [E], and comply with various rules and regulations.
In Michigan, live poker is permitted only in the three private casinos in Detroit and the 17 Indian casinos which are in various locations in the state.
Gambling Laws in Michigan
In Michigan the following forms of gambling are legal but regulated by the state.
- State lottery
- Horse racing
- Charitable gaming (e.g., bingo, raffles)
- Casino gaming on Indian reservations
- Casino gaming in Detroit
Michigan does not allow dog racing, and does not allow slot machines and video poker machines in any place other than a licensed casino.
Efforts to bring in legalized casino gambling in Detroit were first initiated in the 1970s, but failed. In 1994, Windsor Casino opened across the Detroit River in Canada. This provided the impetus for a renewed effort. Ultimately, Proposal E was passed in the November 1996 general election. It led to the enactment of the Michigan Gaming Control & Revenue Act, which permitted the development and licensing of three privately owned casinos within the Detroit city limits. It was followed by the Public Act 69 of 1997, which provided for state licensing and oversight. The Michigan Gaming Control Board was vested with exclusive authority to license, regulate, and control the Detroit casinos. The three casinos are Greektown Casino, MGM Grand Detroit and MotorCity Casino. They initially opened at temporary locations in 1999 and 2000 but later moved to their present permanent sites. The casinos offer gaming machines, table games and poker.
In 2012, a Michigan Casino Gaming Amendment [F] was proposed that sought to add eight more casinos in the state. However, due to widespread opposition it did not make the November 2012 ballot. Detroit’s three casinos produced an increase in revenue in 2015 ($1.38 billion) compared to the previous year ($1.33 billion). The casinos paid more than $111 million in taxes to the state in 2015, compared to $108 million the previous year.
Michigan has a strong Tribal Casinos base. Today, there are 19 such casinos operating in the state of which 17 were established by the end of 1996. The first compacts were signed in 1993, which gave the state some oversight responsibilities over the Tribal Casino operations. The Michigan Gaming Control Board has this responsibility. The complete list of casinos in Michigan can be had here [G]. The Tribal Casinos are “Class III” casinos, which mean that they can offer slot machines, video poker and all casino games. After Michigan sanction the private casinos in Detroit, considerable financial relief had to be given to the Tribal Casinos.
Horse racing is Michigan’s oldest form of legal gambling and was established in 1933. The laws were comprehensively amended in 1995. In 2010, the Office of Racing Commissioner was abolished and regulation of horse racing transferred to the Michigan Gaming Control Board [H]. There are seven tracks, the two largest being in the Detroit area and the other five in southern Michigan. Three of the tracks are meant for harness racing. Both live and simulcast racing are offered.
The Charitable Gaming Division of the lottery was created by the Bingo Act of 1972. Non-profit organizations can be issued licenses to hold bingo, raffles, millionaire parties and other specified events as fundraisers. According to section 432.103(g), the following are qualified to apply for licenses:
(i) A bona fide religious, educational, service, senior citizens, fraternal, or veterans’ organization that operates without profit to its members and that either has been in existence continuously as an organization for a period of 5 years or is exempt from taxation under section 501(c) of the internal revenue code of 1986, 26 USC 501.
(ii) Only for the purpose of conducting a small raffle or a large raffle under this act, a component of the military or the Michigan national guard whose members are in active service or active state service. 1999 political persons and parties were specifically excluded from the qualification of obtaining licenses following allegations of misuse of funds. In 2000 a new bingo game that allows for progressive jackpots was introduced by exempting it from the $2,000 prize cap applied to other bingo games.
Legislators have imposed stricter controls on charity poker from September 2013. An article in Mlive.com [A] stated that the Michigan Gaming Control Board has restricted poker rooms to hosting three charities per day with maximum chip sales of $45,000, instead of six charities with maximum chips sales of $90,000. The events must end by 12am instead of 2am. Other controls are related to tips, seed money and charity qualifications. It has also been alleged that these restrictions were imposed at the behest of the regular casinos.
Michigan established a state lottery in 1972 which operates under the oversight of the Bureau of State Lottery [I]. In 1996, Michigan joined “The Big Game” (now known as “Mega Millions”) which is a multi-state mega-lottery. It currently offers over ten games, some of them having daily draws. Half of lottery revenue is used for prizes and about 35% goes to the state School Aid Fund. Online lottery tickets sales has been approved and their website has been up and running since November of 2014.
Author: Joseph Falchetti (twitter)
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