Michigan Regulator: Online sports betting, iGaming Could Launch In November

Even without emergency rules being issued, iGaming and online sports betting in Michigan could launch in November, a state regulator said Friday.

Richard Kalm, the executive director of the Michigan Gaming Control Board, told Playinmichigan that since licensing and rule-making processes are under way concurrently, the current early 2021 launch estimate could be conservative.

“We’re trying to start the licensing process a little bit ahead of the rules,” Kalm said. “We’ve been doing this a long time, we know some of the things we’re going to need.”

Michigan’s 26 casinos remain closed during the COVID-19 pandemic with online sports betting and iGaming one of the only industry lifelines available to recoup revenue at this time.

There’s no escaping that 2020 will be a rough year for casino revenues, though online gambling could be a bright spot in the fourth quarter.

Kalm: Emergency rules may not impact anyways

Stakeholders and some Republican lawmakers have lobbied Democratic Gov. Gretchen Whitmer to institute emergency rules to fast-track the launch.

The efforts have yet been unsuccessful, as her office told stakeholders in an email last week that the current situation does not satisfy the requirement for emergency rule-making.

Kalm, who was appointed in 2007 by former Democratic Gov. Jennifer Granholm and then reappointed by former Republican Gov. Rick Snyder, said he agrees with the determination of the governor’s office.

“The emergency rules, based on Michigan law, have to be based on health, safety and welfare,” he said. “At this point, I don’t think there’s concurrent that the criteria exists.

“More importantly, it’s not so much the emergency rules that will dictate online gaming.”

In West Virginia, emergency rules have been issued to speed up the iGaming launch, giving regulators authority to issue interim licenses while rules are finalized.

Kalm said the Michigan board issued interim licenses for the retail sports betting launch in March but said emergency rules may not speed up the licensing process.

Draft rules already sent to stakeholders

Kalm said the board has long been in discussions about rules with Detroit’s three commercial casinos about online gambling rules. In addition, many of Michigan’s 12 federally recognized Native American tribes have already announced agreements with operators and platform providers for their online gambling operations.

The MGCB sent draft rules for internet sports betting and iGaming to stakeholders late in April, along with a letter detailing licensing procedures that was dated April 22.

Kalm said supplier license applications will be available on the board’s website by Friday, and that the board is getting feedback from the state’s casinos about the rules.

“They’ve been weighing in and commenting on the rules, so we’ll have a set of rules soon,” he said. “What takes a little bit longer obviously is once we have the rules, it’s the licensing process.”

Kalm said the rules are pretty straightforward, as they used aspects from rules adopted by Indiana, New Jersey and Pennsylvania to guide them.

“We borrowed from them because a lot of these operators and platform providers have already operated in those environment,” Kalm said. “For the most part, nobody fell out of their chairs and said, ‘Oh gosh, we can’t operate like this.’

“Which is a really good thing because the quicker we have feedback and we come up with that rule set, the quicker we can get started in the pipeline and hope for all those other things to happen.”

Kalm said stakeholders have until Friday to get their comments in for review by the board.

Rule-making process is long, can be expedited

The state of Michigan has a rule-making process that estimates a 373-day span from the beginning of the draft rules process until the Office of the Great Seal files them.

Some aspects of the process by the state’s Joint Committee on Administrative Rules or the Administrative Rules Division could be done quicker than some of the estimates, Kalm said.

“These are all things that are kind of beyond the gaming board’s control when it comes to rules,” Kalm said. “If they are willing to meet once and expedite it, and we’re able to get through that process quicker, then they’ll just come online quicker.”

Kalm said a step late in the process where the Joint Committee of Administrative Rules waits 15 session days before final approval has been waived before.

“That can knock off three weeks or a month of it, so you can see where we’re right in there on that November or December timeframe,” he said. “And the feedback we’re getting from all the stakeholders is positive and we don’t have to do a re-write or go through a long, involved negotiation process.”

Online horse racing betting should be faster

The board also issued an order last week to require online operators to be licensed for advance deposit wagering on horse racing.

Kalm said the licensing process, which will take place after operators come to an agreement with Northville Downs and two horsemen’s association, will be faster than online gambling.

“As soon as they sign with one of the platform providers, we think that’s going to be a very, very short process,” Kalm said. “We’re really trying to drive that back into Michigan.

“The technology is there, it’s just a matter of making sure that Michigan, the Michigan horsemen and the track get their portion, and they make it available to the public.”