As expected, Michigan State lawmakers would raise their voices on what looks like a strategy to govern how gambling should be done in the state. For several months even years, the state's lawmakers especially those that love sports betting have shown their immense zeal to ensure there is a change in how things are done.
According to the state's gambling analysts and observers, lawmakers want to change the way the state handles gambling. As such, lawmakers have taken a step to sign numerous legislations that will henceforth govern online casinos, mobiles sports betting, and daily fantasy sports among other forms of gambling.
For instance, most brick and mortar facilities in the state were closed by December 2020. However, with the new legislation, chances are that most if not all offline facilities would be open twenty-four hours a day, seven days a week.
In a bid to show their support for the state's gambling prosperity, JCAR voted unanimously to waive the waiting period, during which the state gambling regulations will be approved. The period in question is 15 days.
If the laws are passed, legal Michigan online casinos outlined here will reap big because they would have received the legislators' backing.
JRAC Approves MGCB Regulations
It was a delicate decision but reasonable that the Michigan Joint Commission on Administration Rules (JCAR) had to pass the rules as they are. The Michigan Gaming Control Board (MGCB) set the rules on the table.
With the passing of the law, it is not clear that MGCB will proceed with its ambitious plan of fielding iGaming applications and mobile sports betting from tribal and commercial casinos. After the passage of the law, Detroit's three casinos commenced their sports betting and online gaming operations.
According to analysts, the passage of the law will enable many casinos in the state to increase their gaming operations. For instance, Detroit casinos mentioned earlier have partnered with a number of other affiliates to ensure they increase their gaming operations.
Thanks to the new laws, the state has also seen some of the top performers make agreements that nobody ever expected. For instance, Greektown has agreed to work with FanDuel and Motor city on iGaming.
The State Keeps Tax Collection at the Minimum
In spite of the changes, which many observers thought would increase revenue numbers; the state has kept tax collection low. In fact, Michigan is perhaps the only US state that has not announced the increment in tax rates imposed on sports betting this year. Several other states have already made the announcement on the increment of sports betting taxes public.
According to the new law, Detroit casinos will still share the same tax revenue percentage, which they accrue from their online sportsbook with the state. Coincidentally, this is the same tax rate lad-based sportsbooks are paying.
However, critics still maintain that there is a difference in the allocation of tax revenue. For instance, Michigan collects 3.78% from the state's land-based sportsbooks. While the state does this, Detroit City retains 4.62%. With this alone, it is clear that although the state has vowed to keep tax rates low, it depends on the location of the sportsbook and the type.
Surprisingly, Detroit City will remain with 30% of all the tax revenue accrued from online sportsbooks. According to the city's gambling revenue planners, 5% of this will go to a fund (Michigan Agriculture Equine Industry Development Fund), which the city has been paying for a long time.
The amount the city pays to the fund is equivalent to $3 million per operator each year. After the city has removed its 30% tax revenue share, removed 5% that goes to the fund, the state takes the lion's share of 65%.
However, all the revenue collected from sports betting, which has any form of partnership with the state will go to the state. These include tax from all internet sports betting sites that are recognized by the state such as tribal-based betting sites.
Online Gaming Likely to Boost Tax Revenue
As of December 9, 2021, Detroit closed all its commercial casinos. The announcement of their closure was devastating but it appeared there was nothing that could be done. The city's public health officials and those from the state informed the decision.
While issuing the announcement, Michigan Governor Gretchen Whitmer said that it was necessary to take the bold step. "We've done so before and there is no harm in doing it again. If by closing the three commercial casinos and other facilities in the state for a few lives to combat the spread of the coronavirus, so be it," said the governor.
Compared to tribal establishments that receive a few visitors each month, commercial casinos in Detroit must adhere to public health warnings and directives. The city's three commercial casinos receive thousands of wagers every month.
During the second quarter of 2021, Motor city, Greektown, and MGM Grand Detroit reported $0 revenue in GGR. The $0 revenue report does not come as a surprise to many especially gaming enthusiasts because the three facilities did not open even for a single day for all three months of April, May, and June.
During the third quarter, casinos' wins in the city of Detroit and Michigan, in general, totaled $163.6 million. This amount is equivalent to a 53.4% loss.
After the casinos' second quarter shutdown, many pundits thought that things would be better during the fourth quarter. Granted, the third quarter saw some activity, which was a relief to casino operators.
However, things went back to a gloomy dark during the fourth quarter. The three commercial casinos remained closed for the better part of December; something ultimately resulted in the casinos performing poorly in terms of tax revenue.
Michigan's Gaming Geared for a Brighter 2022
As Covid-19 numbers continue to drop globally, there is reason to believe that casinos in Michigan will open fully. If that happens, commercial, tribal and online casinos are likely to get back to their feet.
The result is the state will also bag a substantive amount of tax revenue from these sites without necessarily increasing the amount each casino should pay.
