Identity Sector Set to Thrive as Michigan Legalizes Betting

Hand with magnifying glass focused on a person

You might have heard that, after several bills and cross-country voting, online gaming is about to become legal in many US states.

Michigan is the latest; it recently passed a law that allows gaming operators to be based in the state. Interestingly, the opening of such new markets is leading to operators investigating how they can take advantage of new initiatives. It is expected that a number of companies in different sectors will expand, thanks to this new legislation.

What is being legalized

The specific regulations being passed vary somewhat from state to state, but based on Michigan’s bill, we can expect both online casinos and betting to be legalized for those over 21. Licensing conditions will also vary but, as a ballpark, Michigan’s licensees are expected to pay a $100,000 (£75,200) application fee, a $200,000 (£140,400) initial license fee, and an annual fee of $100,000 (£75,200) thereafter. There are also plans for taxation on gaming turnover, to be set at 8% initially.

Local governments have varying plans for taxing gaming companies. In Michigan, 55% of the funds raised will go directly back to the town in which the company is based. Brandt Iden, the representative who proposed the bill, said of its approval, “People in Michigan are already gambling over the internet, but they are doing so at risky and illegal websites. The new Michigan websites will have strict state oversight, unlike the illegal and unregulated sites our residents use now, which put them at a greater risk to their finances and personal information.”

What this means for businesses

In a recent survey by One World One Identity, 43% of the respondents in states where sports betting has been legalized said they would take part in online sports betting during the next year. Of the 306 people polled, a mere 1% said they had already taken part, so it appears that legalization opens up a whole new market. It is thought that, with the strict age restrictions that are included in the legislation, the identification verification industry will see significant growth as a direct result of the bills.

One World One Identity, the firm behind the survey, said: “This growth could present a wave of new and lucrative business opportunities for companies who are qualified to securely verify individual identities on the internet. And, with a sizable portion of respondents — nearly one-quarter — saying they are unsure about online sports betting, this also presents an opportunity for identity service vendors. Specifically, data protection, data privacy, security, ease of onboarding, and tailored experiences could all help convert those on the fence to try their hand in sports betting.”

The new legislation will also create a space for gaming tech startups to operate within more states, hopefully leading to more home-grown talent in the states within the industry, as opposed to those interested in working in the sector who would have to relocate to a state where online gaming has already been legalized.

We cannot forget to mention that the taxes on gaming revenue will also offer a boost to local public services where it is directly re-invested, as it will be in Michigan.

With identity checks just one element of online gaming, it remains to be seen what other new initiatives could be on the cards. These are exciting times in America for the betting industry right now, and it could prove a huge growth market. We will have to wait and see to find out more.


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