Another milestone came into sight on the road to legal online sportsbooks in Michigan, as regulators this week gave notice for a Sept. 23 public hearing for comments on the draft online sports betting regulations published earlier in August.
Adhering to social-distancing measures to mitigate the spread of COVID-19, the hearing will take place virtually, with interested parties welcome to attend via Microsoft Teams. Stakeholders and members of the public may also submit written comments in advance electronically or via regular mail. This is the next step identified in the rulemaking process summary published in late January, with the public hearing serving as the bridge from draft rules to final regulations, and later adoption after review by the Joint Committee on Administrative Rules.
Since Michigan’s legislature passed legislation in December 2019 to legalize sports betting and online casinos, Michigan Gaming Control Board (MGCB) officials have estimated that online sportsbooks and casinos could likely commence operations in the first quarter of 2021, but perhaps a bit sooner.
“We continue to make progress on rule promulgation for internet gaming and online sports betting,” Richard Kalm, the MGCB executive director, said on May 15 when the agency began accepting gaming supplier license forms. “While we expect to launch these forms of betting by early 2021, we hope it can happen sooner.”
In other words, things have been proceeding according to schedule. Eventual sportsbook operators were not invited to submit applications at the same time as vendors in May, however they received the invitation for expeditious vetting and processing once the rules are finalized.
Brick-and-mortar sportsbooks opened in March, quickly closed
Retail sports wagering at all three commercial casinos in Detroit and a growing number of tribal casinos began in March, but casinos and sportsbooks were forced to shutter soon after due to the coronavirus pandemic.
This has left many Michiganders wanting regulators to fast-track the online rules, while the MGCB has moved deliberately throughout. The legislature even gave the MGCB what appeared a symbolic nudge with the late June, pre-summer recess filing of a bill (SB 969) that would bypass the normal regulations process by allowing all of the state’s 12 federally recognized tribes and three commercial casinos to be “considered to hold an internet gaming operator license” pending instruction from the state’s medical chief or federal Centers for Disease Control and Prevention that social distancing was no longer necessary in connection with the COVID-19 outbreak.
The announcement for the Sept. 23 virtual meeting reads:
The rules establish a framework for secure, responsible, fair, and legal system of internet gaming and internet sports betting. The Lawful Internet Gaming Act and the Lawful Sports Betting Act were enacted on December 20, 2019, authorizing the operation, conduct, and offering of internet gaming and internet sports betting which were already occurring in this state illegally. It was found to be in the best interest of this state and its citizens to regulate this activity by establishing a secure, responsible, fair, and legal system of internet gaming and internet sports betting. The systems are designed to protect participants and capture revenue in the form of taxes and payments.
The notice then goes on to outline the scope and function of the sports betting rules, “providing protections for the public in the following ways” that is also not overbearing for those required to comply:
(a) setting forth responsible gaming measures;
(b) providing for integrity monitoring;
(c) providing the Board with oversight capabilities;
(d) providing protections for authorized participants when setting up an account or placing an internet wager;
e) setting qualifications, standards, and procedures for approval and licensure of operators, suppliers, and occupational licensees;
(f) setting technical and security standards; and
g) setting internal control standards for operators and platform providers.
National players preparing to go
Many of the national sportsbook players already operating in several jurisdictions have market access agreements in place, or in-house relationships allowing the sportsbooks to go online. They include BetMGM (MGM Grand Detroit), DraftKings Sportsbook (Bay Mills Indian Community), FanDuel Sportsbook (MotorCity Casino), FOX Bet (Little Traverse Bay Bands of Odawa Indians Gaming Authority), and PointsBet Sportsbook (Lac Vieux Desert Band of Lake Superior Chippewa Indians).
There’s nothing unusual or seemingly controversial in Michigan’s draft rules. The rules contemplate cancellation of a wager deemed an “obvious error” and require sportsbooks to use official league data — a requirement bordering on obsolete as most sportsbooks have now executed agreements with pro leagues for the provision of that data. The rules also do not put a limitation “as to the minimum or maximum internet sports betting wager a sports betting operator or internet sports betting platform provider may accept.”
Viewing the road map altogether, adding this Sept. 23 meeting to the timeline, it looks like the soonest sportsbooks could go live is roughly mid-December, which would allow bettors to get down wagers toward the end of the NFL season or perhaps just ahead of the NFL playoffs.
