Michigan took a baby step towards online poker regulation Wednesday.
The Michigan Senate Regulatory Reform Committee held an informational hearing on SB 889 and SB filed by Senator Mike Kowall last month.
SB 889 would effectively regulate iPoker and casino games in the state while the other would amend the state penal code to allow for iGaming.
Bill Could Create 22,000 Jobs
Wednesday's hearing was 90 minutes long with several testifying in favor of iGaming.
Senator Kowall was quick to point out the benefits of iGaming to the state, estimating that the industry would bring approximately 22,000 jobs to the state in addition to tax revenue
Michigan's unemployment rate as of March 2016 is 4.8% according to the U.S. Bureau of Labor Statistics. Detroit has the highest unemployment rate in the state at 6.2%.
If iPoker was able to generate around 22,000 new jobs, it would drop the number of unemployed workers in the state by almost 9.5%.
Any operator wishing to offer iGaming in the state will have to pay a $5 million licensing fee along with a 10% tax on gross revenues. Presently, the bill limits licenses to just eight.
Michigan is similar in size to New Jersey but with a lower tax rate, one should probably expect income of between 60 to 75% of what New Jersey produced in year one of iGaming.
Verification Technology is an Exact Science According to Amaya Director of Operations
Several spoke in favor of iGaming during the hearing, starting with Poker Player Alliance executive director John Pappas. He gave his typical speech on the necessity of protecting consumers from offshore sites.
Afterwards, a pair of representatives from Amaya Gaming spoke. The first rep spoke at length on the need for online operators to help regulators combat problem gambling.
Director of Operations Steven Winter then gave a talk regarding geolocation and player verification.
Winter also testified that geolocation and verification technology is an exact science, assuring that operators now have the ability to keep games within state limits and keep players out from outside its borders.
Minor Issues Shouldn't Significantly Impact Bill Progress
There are a couple of concerns that were expressed during the hearing, but neither should prove a major obstacle.
The first was whether online gambling would harm the Detroit casino market. While generating $1.3 billion annually, it has been struggling in recent years like the rest of the city.
Spectrum Gaming Group rep Michael Pollack pointed out that live casinos will always be in demand and that they could use online gambling as advertising to players in the state.
The other potential issue is the number of licenses presently allowed under the bill. Only eight licenses are allowed and there are more than eight casinos in the state.
Senator Kowall quickly pointed out that the number of licenses is subject to change if necessary.
Neither issue should prove to be a major obstacle as the state already knows the benefit of online gambling through its successful state lottery.
Now the question remains as to how quickly lawmakers want to act to become the next U.S. state to regulate iGaming.
There seems to be very little opposition to the move but lawmakers also don't appear to be pressured to fast track the legislation.
Right now, we will handicap Michigan iPoker in 2016 at about 40% to pass. Instead, we feel lawmakers may wait until after election season and make a strong push next year.