Submission of Michigan Online Sports Betting Rules Brings State Close to Launch

The Michigan Gaming Control Board (MGCB) submitted the final draft of proposed sports betting regulations last week to bring the market one significant step closer to launching.

Governor Gretchen Whitmer signed Michigan’s sports betting bill into law last year to provide the framework for how the industry will operate. The bill tasked the MGCB with drawing up additional regulations to fill in the details and pave the way for sportsbooks to begin operations.

Now that state regulators have submitted final rules for approval, the next steps are for the Joint Committee on Administrative Rules (JCAR) to approve the regulations and the MGCB to begin issuing licenses to operators.

A look at the final draft regulations provides a preview into how the Michigan online sports betting market will function.

Michigan Online Sports Betting Rules

Beginning with a brief recap, the sports betting bill signed into law last year authorizes Michigan casinos to apply for licenses to operate mobile betting platforms and retail sportsbooks.

Other basics from the law include establishing a minimum age of 21 to participate, setting a tax rate of 8.4% for sportsbooks plus 1.25% for licensees located in cities, and directing the MGCB to adopt additional regulations as needed.

The final draft regulations submitted last week offer more details on what to expect when mobile betting launches in Michigan.

Below are some of the highlights of Michigan’s proposed sports betting regulations. Readers can view the rules in full here.

Type of MI Sports Betting Licenses

The MGCB is responsible for reviewing, issuing, denying, revoking, and renewing licenses. Operators, suppliers, vendors, and certain employees must be licensed under MI law as detailed below.

  • Sports betting operator license: Required to offer sports betting; limited to the operators of licensed commercial casinos in Michigan and tribal groups authorized to conduct Class III gaming ($50,000 application fee; $100,000 licensing fee; $50,000 annual fee)
  • Sports betting supplier license: Catch-all license for those who supply goods and services to sports betting operators; required for technology providers, data providers, affiliate marketers on revenue share agreements, equipment technicians, and more ($2,500 application fee; $5,000 licensing fee; $2,500 annual fee)
  • Occupational licenses: Required for individuals whose “duties directly impact the integrity of internet sports betting as determined by the board in its sole discretion…” ($250 application fee; $250 licensing fee; $250 biennial feel)
  • Vendor Licenses: Required for affiliate marketers not on revenue share agreements, independent integrity monitoring providers, payment processors, anyone who provides over $100,000 worth of goods or services, data centers, and anyone else deemed necessary by the MGCB ($200 application fee; $100 renewal fee every five years)

Technical Standards

  • MI sports betting operators must ensure all bettors are located within state lines
  • If the MGCB authorizes multijurisdictional agreements, operators may accept wagers from persons located in other jurisdictions authorized by such an agreement
  • Operators must submit online sports betting platforms to the MGCB for independent testing and approval
  • The regulations provide many more details on technical requirements for data retention, data security, online security, server security, communication standards, self-monitoring of critical components, and more

Customer Accounts and Betting Rules

  • Operators must provide a clear mechanism by which customers may submit complaints and must respond to complaints within ten calendar days
  • Operators must comply with the Bank Secrecy Act of 1970
  • Operators must have internal controls in place to monitor for suspicious wagering activity and report any suspicious activity to an independent integrity monitoring provider
  • Operators must maintain a reserve capable of covering all customers’ funds and outstanding bet payout amounts
  • Sports governing bodies may petition the MGCB to prohibit certain types of wagers or wagers on a particular event
  • MI regulations do not enforce a minimum or maximum wager size
  • Operators must verify the age and identity of every customer
  • Operators must display responsible gambling messaging to customers and provide info for help with problem gambling

Additionally, sports betting licensees may not accept wagers on any of the following:

  • Horse races if the betting offered is pari-mutuel in nature
  • Events played at the high school level or lower unless the majority of participants are 18 or older
  • Games typically found at a casino
  • Fantasy contests
  • The injury of a participant in a sports event
  • Any type of wager not permitted by federal law or approved by the MGCB

Deposit Methods and Withdrawals

Michigan sports betting regulations authorize the following funding methods:

  • Credit or debit card
  • Cash or cash equivalent at locations approved by the MGCB
  • Promotional credits and winnings
  • Adjustments made by the operators with documented notification provided to the customer
  • ACH and wire transfers
  • “Any other means approved by the board”
  • Operators must honor withdrawal requests within ten business days

Responsible Gambling and Prohibited Participants

Responsible gambling provisions included in Michigan’s sports betting rules require the MGCB to establish a responsible gambling database that contains a list of customers who are prohibited from creating an account or placing wagers.

The MGCB may add customers to the list for a variety of reasons:

  • Violations of law
  • Inclusion on other similar responsible gambling databases
  • Court orders
  • At the request of operators, subject to MGCB approval
  • Any other reason deemed necessary by the MGCB to protect the integrity of sports betting
  • As a result of a voluntary self-exclusion request

Next Steps for the Launch of Michigan Sports Betting

The final rules must stand before the JCAR for 15 session days, beginning October 8th. After that, the Administrative Rules Division will file the regulations with the Office of the Great Seal to make the rules official.

Next, the MGCB will review licensing applications, award licenses, and then give operators the go-ahead to offer online sports betting in Michigan.

When Does Michigan Sports Betting Begin?

The MGCB has not yet committed to a firm launch date for mobile sports betting. However, as BettingUSA’s Steve Ruddock noted in a recent post, insiders indicate the launch could be coming as soon as November or as late as early 2021. A notice on the MGCB website also states online betting is slated to begin “late 2020 – early 2021.”

In any case, mobile sports betting is close to launching in Michigan. Many in Michigan are ready to take online betting live on an accelerated timeline following extended coronavirus-related casino closures and the resulting loss in revenue.

Readers may also follow BettingUSA sister site for updates as the Michigan sports betting market develops.

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