HomePublicationsNewsletter ArchiveVolume 26Issue 25Michigan iGaming and Internet Sports Wagering Supplier Tips

1. Where can businesses interested in working with a Detroit casino or Tribal casino with respect to their online gaming operations obtain information on the licensing process?

The Michigan Gaming Control Board's website has all of the necessary information needed to begin the licensing process.    Here is a link to the specific section of the website: https://www.michigan.gov/mgcb/0,4620,7-351-97573---,00.html

2. Which companies are required to obtain a license to work with a Detroit or Tribal casinos' online gaming operation?

The Michigan Gaming Control Board is following the formal rulemaking process.  The current Draft Rules establish the standard for licensing of both Sports and iGaming suppliers:

Sports betting supplier license. A person that provides goods or services regarding the operation of internet sports betting to sports betting operators is required to hold a sports betting supplier license. Sports betting supplier includes, but is not limited to, the following:

(a)Internet sports betting platform providers

(b)Geofence providers

(c)Sports betting data providers

(d)Software providers

(e)Providers of software that directly affects sports betting or the integrity sports betting in the state of Michigan

(f) Providers hosting live sports betting data

(g) Affiliate marketers that have a payment agreement based on the sharing of gross sports betting receipts or adjusted gross sports betting receipts.

(h) Unless otherwise determined by the board, any other person that meets one (1) or more of the following criteria:

(i) The person manufactures, supplies, or distributes devices, machines, equipment, items, or articles that meet any of the following provisions:

(A) Are specifically designed for use in the conduct of internet sports betting

(B) Have the capacity to affect the outcome of an internet sports bet

(C) Have the capacity to affect the calculation, storage, collection, or control of gross sports betting receipts.

(ii) The person services or repairs sports betting wagering devices, machines, equipment, items, or articles impacting the integrity of internet sports betting.

(iii) The person provides services directly related to the operation, security, surveillance, or management of internet sports betting.

(iv) The person provides other goods or services determined by the board to be so utilized in, or incidental to, the operation of a sports betting operator that the person must be licensed as a sports betting supplier to protect the public and enhance the credibility and integrity of internet sports betting in this state.

Internet gaming supplier license. A person that provides goods or services that directly affect wagering, play, and results of internet games to internet gaming operators is required to hold an internet gaming supplier license. Internet gaming supplier includes, but is not limited to, the following:

(a) Internet gaming platform providers.

(b)  Geofence providers.

(c) Providers of software that directly affect wagering, play, the results of an internet game or the integrity of internet gaming

(d)  Providers hosting live internet gaming data.

(e) Affiliate marketers that have a payment agreement based on the sharing of gross receipts or adjusted gross receipts.

(f) Unless otherwise determined by the board, any other person that meets 1 or more of the following criteria:

(i) The person manufactures, supplies, or distributes devices, machines, equipment, items, or articles that meet any of the following provisions:

(A) Are specifically designed for use in the conduct of internet gaming.

(B)  Have the capacity to affect the outcome of a bet.

(C) Have the capacity to affect the calculation, storage, collection, or control of gross receipts.

(ii) The person services or repairs internet gaming wagering devices, machines, equipment, items, or articles impacting the integrity of internet gaming.

(iii) The person provides services directly related to the operation, security, surveillance, or management of internet gaming.

(iv) The person provides other goods or services determined by the board to be so utilized in, or incidental to, the operation of an internet gaming operator that the person must be licensed as an internet gaming supplier to protect the public and enhance the credibility and integrity of internet gaming in this state.

3. Does a company who is already a licensed supplier under the Gaming Control Act still need to apply under the iGaming and/or the internet sports wagering act?  If so, is the application streamlined in any way?

Suppliers to the Detroit casinos are licensed under the Gaming Control Act. iGaming and internet sports wagering are entirely different forms of legalized gaming and governed under two separate laws, and the laws have different requirements.  While the standards are similar, there is a technical requirement.  A supplier that currently holds a gaming license still must apply for an online gaming supplier license and submit the application with the required information to provide goods or services related to iGaming or internet sports wagering.  According to Kurt Steinkamp, Deputy Director of Licensing, Investigations & Audit, “Current supplier licensees will find disclosure requirements significantly limited in comparison with new applicants’ requirements.  Our goal is to make the application process efficient while ensuring we have accurate, up-to-date information for each applicant.”

4.   Will there be any priorities for certain types of suppliers or what can companies expect related to the process?

The MGCB has published the online gaming supplier licensing forms and currently is accepting submissions.  Given it is the launch of a new form of gaming, the MGCB expects a number of applications will require vetting and suitability determinations.  For this reason, the MGCB strongly recommends submitting all applications as soon as possible as they will be processed in the order they are received.   According to Steinkamp, “The MGCB anticipates a significant uptick in licensing applications within the next several months.  To ensure applications can be considered ahead of these industries ‘going live’, it is important prospective suppliers submit applications as soon as possible.”

5. What are the terms and fees of iGaming and internet sports wagering licenses?

Under both iGaming and internet sports wagering, a supplier's license is good for a five-year term.  Applicants must submit a $5,000 application fee and a $5,000 licensing fee once approved.  A license may be renewed for additional five-year terms upon approval by the MGCB for an additional $2,500 license fee.  Applicants also are responsible for paying investigation fees associated with the application process.

6. What is the current status timeline and expected completion date of the administrative rule-making process?

The MGCB previously distributed its draft rules to interested stakeholders and sought comments and suggestions informally, which it incorporated into the current draft of the rules.  The MGCB has sent the draft rules to Treasury and they will likely be published in the next two weeks.  The draft rules are sent to the Michigan Office of Administrative Hearings and Rules ("MOAHR"), which submits them to the Legislative Service Bureau (LSB) for informal editing for format and style requirements. The agency makes changes based on LSB’s suggestions and resubmits the rules to MOAHR.

The MGCB will publish a notice of hearing to receive any public comments on the rules, and MOAHR publishes the rules in the Michigan Register.  This is when any suppliers who have suggestions to register them with the MGCB if they haven't participated in the informal comment period.  Once the hearing occurs, the MGCB will make any revisions it feels appropriate and forward the rules back to MOAHR along with the JCAR Report. MOAHR sends the rules to LSB, which certifies them, and MOAHR will forward the rules and report to JCAR. 

JCAR must hold the rules for 15 legislative session days unless it waives the time requirement.  JCAR then approves the rules, and the rules are implemented.  The MGCB expects the entire process to take until the 1st quarter of 2021 but may be able to push it through by the end of the year.

 

 

 

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