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Michigan Gambling Online and Offline

Michigan

As with many Midwestern states, Michigan has embraced gambling while also trying to minimize the potentially harmful effects of its now mature gaming industry. There are casinos across the state, not to mention horse racing, a lottery, and rules governing charitable gambling. But one area that has not yet been entered, at least up to this point, is online gambling – though there are some encouraging signs that the government here could jump into that arena in the future.

Slow but Steady Expansion Through Present Day

Michigan’s first foray into the world of gambling came in 1933, when the state passed an act legalizing pari-mutuel horse racing. Since then, regulations on the horse racing industry have been updated several times, and the sport remains popular, though only two tracks remain in operation: Hazel Park Raceway and Northville Downs, both located near Detroit.

The modern gaming industry began in 1972, when voters overwhelmingly approved an amendment to their constitution in order to allow for a state-run lottery. Later that same year, Governor William Milliken signed a bill into law authorizing the creation of the lottery, and it has been running ever since. We also participate in several multi-state drawings, and Michigan one of the initial participants in The Big Game – the massive jackpot now known as Mega Millions. These days, players can even buy tickets and play other lottery games at bars and restaurants that are properly licensed.

Around that same time, the state also authorized the now popular practice of charitable gaming. A law passed in 1972 allowed nonprofits to host bingo, raffles, and ticket drawings, among other games and so-called “millionaire parties,” in order to raise money for their organizations. These games have sometimes been controversial – not the activities themselves, but the limits to which some organizations attempt to push what the law allows – and new regulations have been implemented in an attempt to reign in some of the more outlandish practices, such as venues being set up just to host gambling on a regular basis for a variety of different charities.

Actual casinos made their first appearance in the state in 1993, when the government of Michigan completed a compact with the Saginaw Chippewa Indian Tribe. That would be the first of many compacts entered into by the state; today, there are 11 such compacts with various tribes, governing the rules of approximately 19 tribal casinos currently operating here.

Commercial casinos have also made their mark. In 1996, voters authorized a proposal to allow resorts to be built, though the language was restrictive in a way meant to restrict them only to Detroit without actually referring to the city by name. Today, three venues operate in Detroit: Greektown, the MGM Grand, and Motor City.

The revenues from those three locations has been a serious issue for Detroit, particularly in recent years. When the city entered bankruptcy in 2013, one of the biggest issues was what would become of the tax revenues brought in through gambling. That money had become tied up as collateral to lenders, a move city officials used to avoid having to pay back hundreds of millions of dollars in debt after Detroit’s credit rating plummeted.

For the city, it seemed that casino revenues were the only viable road out of bankruptcy. Thankfully, a federal judge ruled in the summer of 2014 that those revenues belonged to the city itself, and could not be claimed by creditors during the bankruptcy proceedings.

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Online Options Largely Unexplored

If you look back a few years, it’s easy to find a time when Michigan appeared to be heading down a path towards strong resistance to Internet gaming. In 1999, the government actually outlawed the use of the Internet for gambling, something few states have explicitly done in the online era.

However, that law was repealed in the next year, and no such prohibition has been put in place since then. At the same time, there has been virtually no movement when it comes to actually putting in a regulatory framework that would cover online casinos or other websites. While there have been a few comments from time to time suggesting it might be a future possibility, at the moment you can’t buy local lottery tickets or play on any sites licensed in the state.

As with most other US states, that doesn’t mean that you can’t find ways to gamble online in Michigan. Because there are no laws stopping players from participating in Internet gaming, many overseas operators accept our residents. How? Michigan is considered a grey market jurisdiction, so for players, there are no consequences or legal issues to worry about by playing online.

Industry Likely to Play Big Role in State’s Future

At the moment, there do not appear to be any major changes in store for Michigan’s gaming industry. But in this state, that may largely be a good thing for gamblers: the sector has become important to the economy, and that’s unlikely to change any time soon.

Regulations continue to pass and change the landscape around the margins: most prominently, as we wrote above, there are still efforts underway to better define how charitable groups can offer gambling. Michigan is also one of many that are considering what to do with the growing daily fantasy sports industry: it seems that anything from inaction, to a ban, to a requirement of licensing should be in order.

Detroit’s casinos are also likely to continue to be an issue, as they – along with general economic improvement in recent years – have played a major role in sparking a resurgence in the city. But there are still many that question whether such a strong reliance on gambling revenues is smart for the long term health of the city budget, particularly when many areas are seeing profits decline because of increasing competition in the industry.

Finally, there’s the possibility of Internet gaming. While there is potential here, the complete lack of movement (and seeming lack of interest from lawmakers) leads us to believe that there should be no expectation of regulation in the next few years. Michigan could certainly pass an iGaming bill in the future, but it is probably quite far away from doing so at the moment.

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