Your Source For Michigan Gaming News

Since 1997, the Michigan Gaming website has been a comprehensive resource regarding gaming in the state of Michigan. This site is an RMC Ventures, LLC publication, with contributions by the original creators of the site, Attorney David Waddell and Gaming Analyst Robert Russell, and additional contributions by Attorney J.J. Burchman.

Mr. Waddell,  Mr. Russell and Mr. Burchman are also associated with Regulatory Management Counselors, P.C., which proactively assists clients in managing regulatory issues in an effort to maximize company profits and avoid legal problems.

With the recent successful launch of internet gaming and sports betting, The Michigan Gaming Newsletter recently sat down and interviewed Michigan Gaming Control Board ("MGCB") Executive Director Rick Kalm on the process the MGCB used to approach the rollout and to give some information about how the MGCB successfully navigated the task of licensing the operators, platform providers, and the over 200 vendors and suppliers needed to authorize the launch.

The Michigan Gaming Newsletter ("TMGN"): The MGCB staff that worked on the iGaming roll out included how many individuals? Throughout the process, there have been a number of key personnel that have led up certain areas. Do you have any comments as to how the agency approached the organization of the roll out?

Mr. Kalm: "Nearly all of the agency’s operating units were involved in the internet gaming and sports betting rollout.  

The MGCB created a committee led by Deputy Director Kurt Steinkamp and Deputy Director Dave Murley to oversee launch-related issues, and committee members were assigned tasks related to their expertise. For example, Audit Manager Jason Wiard and Assistant Manager Steve Meyer and their staff handled review of internal controls, Gaming Lab Manager Carla Schulte and her staff worked on gaming submissions, and iGaming Manager David Hicks and his staff oversaw platform and remote gaming system requirement compliance and submissions. Charlie Negin of Indian Gaming was the lead on rulemaking and continues to advise colleagues on how they apply to various situations. 

Enterprise Licensing managers John Sullivan and Sarah Rye and their staffs ensured operators, platform providers and suppliers met licensing requirements, and Rye and her team also worked with vendors on registration. Employee Licensing’s Carrie Dodt and her staff handled employee licensing requirements. Investigations were completed by Manager Dan Minzey and his team. The committee met at least weekly for months in advance and convened more frequently as needed before the Jan. 22 launch."

TMGN: How many vendors and suppliers did the agency need to investigate as part of the process? Related to the agency's operating history, how does the licensing expansion compare to other times within the agency history? Did the process go according to plan? Are there other points you may want to highlight?

Mr. Kalm: "The agency’s Investigations section started investigations for 15 internet gaming and internet sports betting operators and 59 internet gaming or internet sports betting suppliers during calendar year 2020. Vendors are registered, not licensed, and do not require background investigations although tax payment and other checks are performed.  The process probably was very similar to the experiences when the agency began initial regulatory reviews and licensing for the Detroit casinos more than 20 years ago. This time, the MGCB had the advantage of many years of regulatory experience to guide staff and the ability to obtain and use information from other states’ gaming regulators. When draft rules became available last spring, MGCB staff could form an approach to vetting internet gaming and sports betting applicants.  The MGCB began to accept online gaming supplier license application forms in May and operator and vendor applications in July. This meant the agency had several months to work with applicants on requirements and conduct required investigations. By Dec. 10, the MGCB had approved 15 platform providers’ provisional licenses. The rules had been adopted Dec. 2 so work could begin on the final phase of licensing in preparation for launch. 

The agency had longstanding business relationships with the Detroit casinos’ operators. Although the MGCB has not licensed and regulated tribal gaming previously, we do have extensive experience working with the tribes and their casinos in our Tribal-State Class III Gaming Compacts oversight role. Tribal representatives and their platform providers have been very helpful throughout this process."

TMGN: Michigan's lab has worked with independent testing labs (ITLs) to complete the process and also has its own role in the process.  Can you comment on this process, on BMM and GLI and the Michigan lab and their respective roles? 

Mr. Kalm: "The ITLs really helped us manage the submissions volume efficiently. Our Gaming Lab staff had confidence in the ITLs as they have worked together on gaming device testing for the Detroit casinos since 2018.  The agency reviewed and approved the ITLs’ testing procedures before authorizing them to test internet gaming and sports betting products. This ensures they conduct testing that’s consistent with the acts, rules and prescribed technical standards.  It’s important to note the ITLs test platforms, games and other systems and issue certification letters, but the MGCB has approval authority. The ITL certification letter is among many items the MGCB reviews when determining whether to approve a platform, game or system for use in Michigan."

TMGN: Michigan is joining other states that have launched iGaming, but Michigan is the only state with the mix of commercial and Native American operators. Can you share any thoughts as to how the process has played out? From what it appears, the State and the tribal operators have had a great partnership in launching the new iGaming industry.

Mr. Kalm: "Michigan created a model for the U.S. gaming industry by establishing a path for the tribes to obtain licenses for statewide internet gaming and sports betting.  The agency established a good working relationship with the tribes through its Indian gaming oversight function, which strengthened as we began to work with them in a regulatory capacity.  We also worked closely with the tribes during the rulemaking process. Their feedback was key to ensuring an efficient, successful launch. 

The MGCB looks forward to a continued strong relationship with the tribes as we begin regulating internet gaming and sports betting."

TMGN: Now that internet gaming and sports betting has been live for over a month, can you share any thoughts as to how the MGCB and key players in the State have continued to work together to keep things running smoothly? How have things gone according to plan, or how have they not gone according to plan? 

Mr. Kalm: "The launch of internet gaming and sports betting got off to a good start, and since Jan. 22 we’ve added two more tribal operators (Little Traverse Bay Bands of Odawa Indians and the Pokagon Band of Potawatomi Indians’ Four Winds casinos) and authorized Greektown Casino’s internet gaming launch. More recently, we have given guidance to improve platform providers’ understanding of patron dispute process requirements for their sites and use of the agency’s logo in advertising, which is prohibited. I’m very grateful to everyone who contributed to a smooth launch for Michigan just 13 months after the laws authorizing the gaming were signed."

TMGN: The revenue report for the first 10 days of operation in January looks promising for the State of Michigan, the City of Detroit, and tribal governments. Do you have any comments you would like to share on how internet gaming and sports betting will be beneficial for communities throughout the State? 

Mr. Kalm: "COVID-19 health concerns meant both commercial and tribal casinos were closed for part of 2020. Of course, this impacted gaming tax revenue for the state, particularly K-12 education, and the City of Detroit as well as revenue the tribes share with the Michigan Strategic Fund and use to provide government services for their communities. The new forms of gaming provide another revenue source for all of these entities and for K-12 education in Michigan.  In the long run, internet gaming likely will provide the largest source of tax revenue of the new forms of gaming because the tax and payment rates are so much higher — ranging from 20-28 percent versus 8.4 percent for internet sports betting."

TMGN: As the launch unfolds any other comments you feel you would like to share with the Gaming industry, Michigan officials or the public at large? 

Mr. Kalm: "Launch is the first step in an ever-evolving market. I’ve seen published reports on the popularity of internet poker in Michigan, and the sports betting results for February and March should be interesting because of the Super Bowl and March Madness. Taxes and payments were lowered by free play and other promotions in January, and this probably will continue for the near term as providers use incentives to attract customers.  Aside from the impending launches, the agency will work on live studio games requirements, cashiering options and the multi-state poker agreement in the coming months. Our sportsbook catalog has grown, and the MGCB continues to review providers’ suggestions for new leagues, games and wagers. 

I’d like to thank my staff and all of the people involved in bringing legal, regulated internet gaming and sports betting to Michigan. I hope the public will enjoy the games and Michigan and tribal communities’ citizens will benefit from the revenue.  

Finally, March is Problem Gambling Awareness month. I ask anyone who wants to control their gaming or needs help with gaming addiction to use the temporary or permanent self-exclusion tools on the platform providers’ sites, apply for inclusion in the MGCB’s responsible gaming database or contact counseling options such as the Michigan Department of Health and Human Services gambling helpline, 800-270-7117."

TMGN: Thank you for speaking with us and congratulations to you and your staff on implementing what appears to be a very successful launch.

 

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