Michigan lawmakers approve regulations for mobile sports betting and online casinos
As expected, Michigan lawmakers have passed regulations governing daily fantasy sports (DFS), online casinos and mobile sports betting in the state.
The Michigan Joint Committee on Administrative Rules (JCAR) voted yesterday to waive the 15-day waiting period for approval of proposed state regulations. The decision accelerates the acceptance of online gaming and generates much-needed tax revenue for the state and city of Detroit.
JRAC approves regulations established by the Michigan Gaming Control Board (MGCB) and tax rates established by the state Legislature. MGCB can now continue to offer mobile sports betting and iGaming apps from commercial and tribal casinos.
Detroit's three commercial casinos are ready to begin operating online gaming and sports betting.
MGM Grand Detroit has partnered with parent company interactive gaming platform BetMGM. Motorcity and FanDuel have agreements with iGaming and Greektown. They will use the company's online gaming platform powered by IGT and its Barstool Sportsbook.
Michigan keeps taxes low
Unlike other states, Michigan will not increase tax rates on online sports betting revenue.
Detroit casinos will share 8.4% of their online sports betting profits with the state. This is the same tax rate that applies to three brick-and-mortar sportsbooks.
However, there are differences in how Internet sports betting taxes are used. For brick-and-mortar sports betting operations, the state of Michigan receives 3.78% of sports betting tax revenue, with the city of Detroit retaining the remaining 4.62%.
But Detroit retains 30 percent of the tax on online sports betting revenue. 5 percent goes to the Michigan Agriculture Equine Development Fund (up to $3 million per operator per year), and the remaining 65 percent goes to the state.
For Internet sports betting conducted in partnership with one of Michigan’s federally recognized tribes, 100% of tax revenue goes to the state.
Internet casinos are taxed on gross gaming revenue (GGR) at a rate of 20% to 28%, with the final tax rate depending on adjusted gross revenue. Detroit casino iGaming is split between the state and the city, while the tribe's online tax revenue belongs entirely to the state capital. DFS operators will share 8.4% of their monthly revenue with the state.
Online games can boost sales
Detroit's three commercial casinos will be closed again until at least Dec. 9 under an order from Michigan Gov. Gretchen Whitmer (D). COVID-19 has been a devastating year for gaming establishments, which, unlike tribal casinos, must adhere to state guidelines.
MGM Grand Detroit, Motorcity and Greektown had $0 GGR in the second quarter as they were forced to stay dark for three months.Casino profits totaled $163.6 million in Q3 - a year-over-year loss of 53.4%.
The fourth quarter could be another dismal quarter as casinos close again. Online gaming and mobile sports betting will allow the three casinos to generate some revenue during possible government-mandated shutdowns in the coming months.
The MGCB said the first online casino bets and mobile sports bets could take place by the end of the year.
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Source: www.casino.org
