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Michigan‘s efforts to get casino and sports betting apps off the ground have hit an unexpected snag. What is perhaps not surprising is that the problem stems from a conflict between federal and state agencies. Few, however, would have predicted that access to the FBI’s fingerprint database would become an issue.
And yet, that is exactly the position that the Michigan Gaming Control Board (MGCB) has found itself in. Its own rules require checking license applicants’ fingerprints as part of a standard background check. This has been the case all along for land-based gambling licenses, but it was only recently that the FBI decided that the wording of the MGCB’s statutes didn’t allow for this.
Michigan online casinos, sportsbooks and poker rooms were expected to launch in the state early next year. Regulators have been rushing to try for an accelerated launch, and are currently in the process of finalizing the rules. The best-case scenario was for the first sites to go live in October. This was looking like a long shot to begin with, and federal red tape can’t be helping matters.
The issue was made public at the MGCB’s last meeting on Tuesday, and reported by PlayMichigan.
Bureaucracy, not malice
There is a long history of the federal government attempting to meddle in states’ efforts to legalize online gambling. The most recent example is the ongoing legal battle between the Department of Justice and the New Hampshire State Lottery over whether the Wire Act precludes all interstate gambling, or only sports betting.
This new issue doesn’t appear to be related, however, nor intentional. The FBI informed the MGCB of the issue prior to the passage of the state’s Lawful Internet Gaming Act last December and instructed the regulator on how to amend the board’s statute to fix the problem. That correction was included in the bill, but FBI approval of the new language is taking longer than expected.
The timing is unfortunate, as the ongoing COVID-19 pandemic makes access to legal online gambling options more important than ever. However, the FBI’s own problems may be related to that as well. MGCB Executive Director Richard Kalm said as much at the meeting.
“Really it’s a matter of getting us to the top of their pile,” he explained, “because COVID has slowed their processes down immensely.”
A late 2020 Michigan launch isn’t off the table yet
Further corrections to the relevant text may be needed. Kalm acknowledged that the need to work with the FBI’s attorneys to finalize the language might affect the regulatory timeline.
MGCB communications specialist Mary Kay Bean had previously told OnlinePokerReport that any delay in the rule-making process would push the launch back into early 2021. Fortunately, this new complication only impacts licensing, which is taking place in parallel with the work on the rules.
We don’t think the rule process is going to be the hold-up,” Kalm said. “It’s going to be whether or not we can get licensing suppliers and operators, getting that particular part.”
Even so, October now looks far less likely to happen. That doesn’t mean Michigan gamblers will necessarily have to wait for next year, however. Kalm remains optimistic on that front.
“Hopefully we can get these things off the ground before the first of the year,” he said.
Roughly three-quarters of eligible applicants await licenses
In the meantime, license applications are piling up. MGCB staff members have been working from home during the pandemic, which Kalm says makes the process all the more cumbersome.
As frustrating as the lack of a clear launch date may be for Michigan gamblers, it’s probably for the best. The MGCB seems to be trying to avoid a repeat of the scenario in Pennsylvania, where the regulator committed to July 15, 2019 as the launch day, but had only authorized two operators to launch by the time that date rolled around.
Whenever it happens, the launch of Michigan sports betting apps and casino apps looks like it should be bigger and better synchronized than that. Eleven of the state’s 15 eligible operators have applied for licenses, as well as 15 suppliers and 8 vendors.
The MGCB’s privacy policies don’t allow it to specify which parties have applied until their licenses are approved. However, we can deduce most of the applicants based on the companies’ own announcements over the past seven months. Here’s a summary of the known or presumed Michigan partnerships so far:
|MGM Resorts||BetMGM||MGM Grand||Detroit|
|Penn National||Barstool Sports||Greektown||Detroit|
|IH Gaming (MotorCity)||FanDuel||MotorCity||Detroit|
|Little Traverse Bay Bands of Odawa Indians||The Stars Group||Odawa||Petoskey|
|Lac Vieux Desert Band of Lake Superior Chippewa Indians||PointsBet||Northern Waters||Watersmeet|
|Nottawaseppi Huron Band of Potawatomi||Scientific Games||FireKeepers||Battle Creek|
|Grand Traverse Band of Ottawa and Chippewa Indians||William Hill||Turtle Creek||Traverse City|
|Bay Mills Indian Community||DraftKings||Bay Mills||Brimley|
|Little River Casino||BetRivers||Little River||Manistee|