Smartphone gambling regulations under review by state

A trio of bills that would legalize and regulate online gambling from a smartphone or computer is awaiting a vote in the Senate before year’s end.

If the Senate approves, the state’s three commercial casinos and 24 tribal casinos could set up online platforms through which players could gamble. That includes sports betting, poker, blackjack and any online version of games offered at the casinos.

Michiganders would be able to gamble on college and even high school sports if a casino chooses. Supporters say it could boost state revenues. Critics worry that it will increase problem gamblers.

“If you reduce gambling to a screen 10 inches in front of your face, the people who are predisposed to a gambling problem are going to have tremendous problems,” said Michael Burke, director of the Michigan Association on Problem Gambling, which is based in Portage.

The bills passed in the House in June with a solid majority. The package now awaits a vote by the Senate Committee on Government Operations.

Federal law does not prohibit a state from regulating online gambling within its borders. Delaware, Nevada, New Jersey and most recently Pennsylvania are the only states to have done so. A U.S. Supreme Court ruling in May removed federal restrictions on sports betting, including the use of licensed online gambling platforms.

“At the end of the day, I want to basically put regulations on the games in the online market and bring the market out of the dark,” said Rep. Brandt Iden, R-Oshtemo Township, a sponsor of the bills. “I think in order to do that, we need to put consumer protections in place. We need to regulate it and then, of course, tax it.”

Gambling sites that illegally conduct business abroad often take part in unscrupulous business practices, such as refusing to pay winners and taking advantage of gambling addicts, Iden said.

Last year, the House passed Iden’s resolution to declare March as Problem Gambling Awareness Month.

“A lot of folks play poker online and most don’t even know it’s illegal,” Iden said. “That’s revenue that could be taxed in the state of Michigan, which would, of course, help our budget, as well.”

Motor City Casino and MGM Casino in Detroit support the bills. The Michigan Gaming Control Board, which licenses and regulates gaming at the Detroit casinos, remains neutral. The Sault Ste. Marie Tribe of Chippewa Indians opposes the bills.

The National Indian Gaming Commission, which regulates all Indian casinos nationwide, does not comment on pending legislation, said Mark Gaston, a communications specialist at the commission.

Iden said he expects the bills to come out of the Senate and head to the governor’s desk for signature in the next three weeks. The bills will die if they don’t pass before the end of the year.

While Iden said the change could increase revenues, an analysis by the House Fiscal Agency indicated they could drop because of a difference in the tax rate with existing gaming sources. The state collects 19 percent of casino gaming revenue and would collect 8 percent of online gaming revenue if the bills become law.

But Iden said that rather than displace current venues, online gambling would create new markets.

In 2017, annual commercial casino gaming revenue in Michigan was $1.4 billion, with the state collecting $340.5 million in gaming tax revenue, according to an American Gambling Association survey.

“What this does is open it up to new players and expands the base to probably younger millennial types who are used to doing everything on their mobile device anyway,” Iden said.

The Michigan Association on Problem Gambling vehemently opposes the state’s push to legalize online gambling, but sees it as inevitable, Burke said.

He added he was a closet gambling addict for years and spent three years in Jackson State Prison for embezzling funds from clients in his law practice. He now travels the country speaking about the dangers of compulsive gambling.

In 2016, Michigan spent $2,279,184 on problem gambling services, which ranked 21st in the country in terms of per capita public funds dedicated to such services, according to a National Council on Problem Gambling survey.

The state offers a free 24-hour gambling hotline and weekly Gamblers Anonymous meetings for residents. The Department of Health and Human Services, which administers these services, also offers a once-a-week, 12-week outpatient individual therapy program for gambling addicts.

“That leaves the gambler with about six days and 20 hours with no help,” Burke said. “And there’s only one thing we know for sure — the number of compulsive gamblers will increase with an increase in gambling venues.”

Iden’s bills would set aside an additional $1 million toward the state’s problem gambling fund from the tax revenue brought in from online gambling.

“If the state is going to do this, make sure that measures are put in place to find and treat the compulsive gambler and their families,” Burke said.

“Because you can’t smell a deck of cards on a gambler.”

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