Michigan regulated iGaming will soon be a major topic in poker media circles as lawmakers decide whether Michigan becomes the fifth jurisdiction to formally legalize online gambling in the United States.

The following STUDY GUIDE is provided as a service to all interested parties who would like to learn more about what was discussed in a recent House Regulatory Reform Committee hearing that took place on September 13th, 2017. The one-hour video series includes testimony from both sides of the regulated iGaming argument, and has been provided here courtesy of the official Poker Players Alliance YouTube channel.

Since the time of this hearing, three major events have happened that could affect the outcome of Michigan regulated iGaming:

Lawmakers in NJ, NV and DE Agree to Shared Online Gambling Player Pools (October 2017)
Pennsylvania Becomes Fourth US Jurisdiction to Regulate Online Gambling (October 2017)
MI House Regulatory Reform Committee Advances House Bills 4926-4928 (December 2017)

Please take the time to review and share this material if you are interested in regulated iGaming legislation in the United States, as it provides a treasure trove of information for anyone seeking to become more informed on the Michigan regulated iGaming debate.

Michigan Regulated iGaming – VIDEO #1 – Sep 13, 2017

Michigan House Bills 4926-4928
MI State Rep. Brandt Iden (R – 61st House District – Kalamazoo)
Regulatory Reform Committee Chairman

(0:00) Intro, Rep. Brandt Iden – Chairman, MI Regulatory Reform Committee
(1:26) Iden believes regulated iGaming in Michigan is inevitable
(1:48) Mobile device usage is commonplace in society, will drive market and economic forces in future
(2:22) NJ/NV/DE already offer regulated iGaming, PA games go live soon, “Dark Web” Dangers
(2:56) Why Michigan is being meticulous in its discussion of regulated iGaming

Michigan Regulated iGaming – VIDEO #2 – Sep 13, 2017

Former Michigan Attorney General Mike Cox (2003-2011)
Managing Partner – Mike Cox Law Firm, PLLC

(0:00) Intro, three “high points” of Michigan House Bills 4926-4928
(0:48) Consumer protections, state control of iGaming, state iGaming revenue generation
(2:03) HB 4926-4928 are result of collaboration with NJ/NV/DE iGaming regulators
(3:03) Cox opines that iGaming servers located on MI casino properties abide by state constitution
(4:06) Bills restrict online gambling to already-established Detroit and tribal land-based operators
(4:58) HB 4926-4928 are supplemental to 1996 MI Gaming Control and Revenue Act & 1997 Public Act 69
(6:49) Gaming Control Board would oversee Michigan regulated iGaming
(7:19) Brief overview of Geolocation technology and Know Your Customer guidelines
(8:22) Current regulated iGaming technology provides consumer protections against ID theft
(9:08) Former AG Cox compares current New Jersey figures to projected MI iGaming revenue
(9:34) Reference to possible interstate player pool compacts such as NJ/NV/DE agreement
(10:13) Clarification of The Stars Group/Amaya? (Rep. Joseph Bellino – R – 17th District – Monroe)
(10:46) Can online ops combat Problem Gambling? (Rep. Jeremy Moss – D – 35th District – Southfield)
(14:09) Could non-compacted tribal casinos become Michigan iGaming operators?

Michigan Regulated iGaming – VIDEO #3 – Sep 13, 2017

David Murley – Michigan Gaming Control Board Deputy Director
Legal Affairs & Gaming Regulation Division

(0:00) Intro, MGCB Deputy Director is “neutral” on HB 4926-4928
(0:54) Murley states that Michigan has capability to regulate iGaming, references Michigan iLottery
(2:11) Lawmakers must consider Michigan constitution, reference to server locations in amended bills
(3:19) Can amendments to locate iGaming servers on casino property withstand constitutional challenges?
(4:09) Legality of piggy-backing US federal law concerning tribes for statewide iGaming regulation
(5:10) Distinction between Detroit’s three casinos and tribal compacts
(6:18) Online gambling revenue from New Jersey has been positive but NV/DE numbers have disappointed
(6:54) Would iGaming tax (amended to 10%) cannibalize land-based interests who pay 23%-24% on GGR?
(7:44) Concerns over amended bill allocating a portion of funds toward MDARD (Michigan Department of Agriculture & Rural Development) via the Michigan Grape and Wine Industry Council

Michigan Regulated iGaming – VIDEO #4 – Sep 13, 2017

David Cookson – Legal Counsel for Coalition to Stop Internet Gambling (CSIG)

AUTHOR’S EDITORIAL NOTE: Regulated iGaming proponents (including myself) have traditionally shied away from granting a platform to organizations that oppose online gambling, as their views typically conflict with our own. However, Mr. Cookson’s testimony on behalf of CSIG (backed by Sheldon Adelson) is public information, has been shared via the official PPA YouTube channel, and is necessary study material for all who wish to gain a more complete understanding of the Michigan regulated iGaming debate.

(0:00) Intro, David Cookson is former Chief Deputy Attorney General for Nebraska (2007-2014)
(0:56) Cookson and CSIG “strongly oppose” Michigan House Bills 4926-4928
(1:25) References to USDOJ’s ongoing review of Obama administration’s Federal Wire Act interpretation and the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006
(4:07) Cookson cites recent pressure from several key lawmakers for a federal online gambling ban
(4:29) Cookson warns if 2011 DOJ legal opinion is overturned, states that have authorized iGaming could face federal prosecution
(5:28) Rep. Iden asks Cookson to clarify who CSIG’s members are
(5:43) Former Michigan Solicitor General John Bursch (2011-2013) believes HB 4926-4928 would need to be passed by voters statewide (see 1996/97 Gaming Control and Revenue Act from Video #2 at 4:58)
(6:37) Cookson disputes iGaming revenue projections (Pennsylvania has since legalized online gambling)
(7:19) Cookson argues that regulated iGaming cannibalizes brick & mortar casino industry
(7:40) Internet security & safety concerns – Chairman Iden references recent Equifax Data Breach Scandal
(9:08) Cookson summarizes CSIG’s argument in opposition of Michigan regulated iGaming

Michigan Regulated iGaming – VIDEO #5 – Sep 13, 2017

John Pappas – Executive Director, Poker Players Alliance (PPA)

(0:00) Intro, John Pappas calls CSIG’s rhetoric “fear mongering” – lays groundwork for argument
(1:54) Pappas points out CSIG’s hypocritical stance opposing mobile gaming as it relates to Adelson’s iGaming promotion in Nevada through Las Vegas Sands Corp’s Venetian property
(2:57) Online gambling “prohibition” simply herds consumers to unregulated operators
(3:16) Michigan residents currently have access to unregulated iGaming sites
(5:19) Michigan lawmakers should “corral” unregulated iGaming and license it out to existing tribal and Detroit operators
(5:54) 2006 UIGEA specifically allows statewide regulation of iGaming
(6:39) Positive New Jersey figures suggest other states can increase revenue via iGaming without raising taxes
(7:08) Michigan regulated iGaming could raise $40m-$50m in annual revenue, cited June 2017 iDEA Study covering NJ iGaming from 2013-2016 – $1 billion in economic output – nearly 3,500 new jobs – $219 million paid out in iGaming employee wages – $124 million in online gambling tax revenue, and land-based Atlantic City casinos are not being cannibalized as a result
(8:44) Why do HB 4926-4928 propose a minimum online gambling age of 21? (Rep. Michele Hoitenga – R – 102nd District – Manton)
(10:21) Would Michigan gamblers choose unregulated iGaming options over legalized sites due to higher Return to Player (RTP) payouts? (Rep. Roger Hauck – R – 99th District – Mount Pleasant)
(11:26) Chairman Iden references “unscrupulous” unregulated sites that return player funds in Bitcoin
(11:51) Are states truly generating new revenue from regulated iGaming? (Rep. John Chirkun – D – 22nd District – Roseville)

Michigan Regulated iGaming – VIDEO #6 – Sep 13, 2017

Jeanne David – Head of Responsible Gaming, The Stars Group
Martin Stuart – Director of Security Services, The Stars Group

(0:00) Intro, Jeanne David – licensed social worker from New York, Certified Addiction Counselor (CAC)
(1:03) The Stars Group – over 100 million registered players, currently licensed in 17 iGaming jurisdictions (including New Jersey), claims 72% of global online poker market and 70% worldwide online casino market
(1:35) Social Responsibility parameters (displayed on screen)
(1:52) Explanation of TSG’s Responsible Gaming features
(2:17) Limiting/Restricting access to problem gamers
(2:38) How deposit limits and table limits function
(3:20) Self-exclusion features, New Jersey blacklist, timeout and block features for specific games
(4:33) Customer Support & Problem Gambling
(5:13) Responsible Gaming partnerships

(6:21) Martin Stuart intro, Global Operations overview
(7:34) Security Services – Know Your Customer (KYC) guidelines and UK Customer Due Diligence (CDD)
(8:59) Stuart has worked in the gaming industry for 25 years, 15 of those were in a land-based casino
(9:28) Security Services – key facts and figures
(10:05) Geolocation features currently in use in regulated New Jersey iGaming environment
(11:16) Security – Legal overview, hacking
(11:55) Game Integrity overview, collusion and more references to brick & mortar casino security flaws
(12:55) Stuart states that 90% of all colluders and 80% of prohibited software are detected by Stars Group
(13:10) Game Integrity – key facts and figures
(13:39) Age Verification tools
(14:24) The Stars Group business model markets to “fun” players who do not spend extended amounts of time gambling online
(15:07) What iGaming security measures do TSG’s competitors employ? (Rep. Eric Leutheuser – R – 58th District – Hillsdale)
(16:42) Facial recognition and machine learning technology, importance of form analytics tools
(17:30) Customers are familiar with online games, are mostly concerned about stolen funds and cheating
(17:50) Does TSG deal strictly in the software component of proposed Michigan iGaming regulation? (Rep. Lana Theis – R – 42nd District – Brighton)

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ABOUT THE AUTHOR: David Huber has been involved in the iGaming industry as a writer, editor, podcast host and consultant since 2004. His experience covering legislative agendas dates back to the early 1990s as a broadcaster/news service provider for terrestrial AM/FM radio stations.

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