No vote on Michigan Senate online gambling bill

Michigan state Senator Mike Kowall’s SB889 proposing the legalisation of intrastate online gambling (see previous reports) received its first public airing Wednesday in an informational hearing by the Senate Regulatory Reform Committee which was addressed by a number of industry experts.

Five of the nine members of the committee are co-sponsors for Kowall’s bill, ensuring that the hearing was generally positive in nature and educational for lawmakers.

Sen. Kowall started the hearing by stressing the need for proper consumer protection for the state’s many online gamblers, who could be at risk playing on unlicensed offshore websites instead of strictly regulated and licensed Michigan enterprises operated by existing and strictly controlled land casino companies who pay tax revenues to the state.

Kowall revealed that land operators in the state had written to the committee advising they held a neutral position on online gambling, before he introduced the first speaker, Poker Players Alliance executive director John Pappas.

Pappas reprised for the most part his powerful pro-legalisation testimony before a Californian legislative committee earlier this month (see previous reports), demonstrating on a laptop how easy it is for Michigan residents to access unlicensed offshore sites.

He went on to extol the virtues of state regulation and licensing as a consumer protection model, referencing the lack of underage or problem gambling, criminal activity or geo-positioning inaccuracies in the three US states that have legalised online gambling, and noting the strict anti-money laundering and financial controls in place.

Referencing the Lock Poker debacle as an example of the dangers to Michigan players, many of whom are active online, Pappas suggested that SB889 was an opportunity for Michigan lawmakers to protect consumers and add a new revenue channel for the state’s land operators.

Commenting on the ubiquity of the Internet, Pappas asserted:

“Extending oversight into internet gaming is simply a reflection of our modern-day society. Michigan can choose to ignore the internet, or it can embrace it for the benefit of its citizens and regulate it to protect them.”

Pappas was followed by three managers responsible for responsible gaming, compliance and operational activity in the Amaya-Pokerstars group.

Jeanne David, Steven Winter and Matthew Robins each gave detailed and impressive overviews of the extensive consumer protective and anti-criminal and collusion measures deployed by their company, portraying measures the equivalent of bank and financial institutions processes and procedures which are common to major online gambling firms.

Their testimony was a powerful and factual refutation of much of the misinformation pushed out regularly by opponents of online gambling.

Michigan Gaming Control Board deputy director David Murley followed the Amaya speakers, advising that state governor Rick Snyder is presently neutral on the Kowall bill, and confirming that his organisation is more than capable of regulating and supervising an intrastate online gambling market.

However, he was worried about a provision in the bill that could allow punters from other states where online gambling is permitted to play on Michigan sites, saying that this could raise serious legal and policy questions.

He also suggested that the Michigan constitution may require residents to approve what might be construed as an expansion of gambling, and that there could be complications with the state’s compacts with tribal gaming interests.

Michael Pollock, a senior executive with the Spectrum Gaming consultancy, followed the Murley presentation, explaining that online gambling presented an opportunity for land gambling companies to not only enjoy a new revenue channel, but to access a significant new demographic and enhance marketing activity.

Pollack was concerned that only eight licenses were proposed, which would be issued to existing land operators at appropriate additional license, tax and application fees. However there were more than eight land operators in Michigan, he pointed out. Sen. Kowall responded that the number was a proposal which could be changed if necessary as the bill progresses.

Other concerns examined by committee members included language in the bill concerning interstate compacts, and a requirement that tribal gambling interests should voluntarily surrender claims of sovereignty in regard to business done with off-tribal lands players.

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