How Michigan Gambling Laws Have Evolved

by | Dec 20, 2023 | casino | 0 comments

Gambling has had a turbulent past in almost every American state. This is because nearly all forms of gambling were prohibited nationally in 1910. However, individual states slowly began fighting for the right to allow gambling—and many of these states won their battles.

Michigan, like many others, has a long history of gambling. Many years of law changes eventually enabled the Great Lakes State to permit gambling activities. The state now generates more than $2.3 billion in revenue for the gambling market annually. 

Early Gambling

Due to the prohibition of gambling in 1910, gamblers in Michigan were left with virtually no legal options for placing wagers. The first gambling opportunity for these players occurred 23 years later, in 1933.

That year, the local government decided to allow pari-mutuel bets to be placed on horse racing events. This decision was written into law under the Racing Act of 1933, thus becoming the first legal form of gambling in the region. 

To regulate the placement of wagers and their revenue, the state created the Office of the Racing Commissioner. The office was responsible for allocating race schedules and issuing licenses to any track that wanted to accept bets.

Any raceway accepting wagers was quickly flooded with fans eager to partake in legal gambling—there was no denying that gambling was immensely popular among Michigan residents. Despite this, no new laws to provision further betting games were introduced until almost 40 years later. 

The Beginning of Change

In 1972, voters in the state took to the polls to show their support for establishing a state lottery. Overwhelming numbers voted in favor of the idea, which was quickly ratified through an amendment (Public Act 239) to the state’s constitution. Within the same year, the Michigan Lottery was founded.

The same year, further work was done to legalize other forms of gambling. Public Act 382 was passed, allowing charities and non-profit organizations to legally organize raffles, millionaire parties, and bingo games. 

Following this, there was another lull period of gambling law initiatives. The only notable adjustment happened in 1981 when the legislature, after seeing how popular the lottery had become, passed a regulation stating that lottery revenues would be issued to the state’s School Aid Fund.

Three years later, Fred Dakota, a tribal member of Keweenaw Bay, brought a challenge against the local legislature over its ability to regulate tribal gambling. A few months later, the first tribal-owned casino in America, Kings Club Casino, was opened in Michigan within the tribal region of Brimley. 

Rapid Advancement

Following the precedent set by Kings Club Casino, other tribal operators began petitioning the state to allow for more casino openings. Not much progress occurred on this front until 1993, when the state signed an agreement with the Saginaw Chippewa Indian Tribe.

This agreement allowed for the formation of another tribal casino on one condition: two percent of all winnings from the Soaring Eagle Casino & Resort was to be paid to the state. Proceeding as planned, the casino was launched, offering players more variety in available casino games. 

Three years later, talk began about allowing commercial casinos to operate in the state. Following a vote undertaken by state residents, Proposal E was approved. This proposal suggested the issuing of licenses to three casinos that were to be constructed in Detroit. 

In 1997, Proposal E evolved into the Michigan Gaming Control & Revenue Act and was officially instated into law. As described, it allowed for three commercial casinos, all opening between 1999 and 2000. 

Online Gambling Bills

The government was happy with the gambling regulations of the early 2000s. However, by the early 2010s, the advent of online casinos and gambling platforms led to further questions and investigations. 

In 2014, the lottery was the first form of gambling in the state to offer online services. At the time, online casinos were still not covered under local regulation, and sports betting was still controlled nationally.

Two years after this, Senator Mike Kowall proposed a bill to make provisions for online casinos— though the bill only applied to tribal or commercial casinos already operating in the state. However, the bill failed and was rejected again a year later.

By 2017, Republican Brandt Iden took up the fight and proposed a new bill that placed tribal casinos under the regulation of the Michigan Gaming Control Board and made provisions for the regulation of sports betting—despite it still being wholly illegal at the time.

After the landmark federal ruling that allowed states to decide on sports betting legality in 2018, favor for the bill increased, and it was finally approved. However, it was vetoed by Governor Rick Snyder and fell flat. 

Online Evolution

Reappearing in 2019, Iden proposed a series of bills that would establish a legal framework for online casinos, regulation for online and in-person sports betting, provision for online poker, and laws for fantasy sports. This time, the bill was passed and signed into law by Governor Gretchen Whitmer.

Just one year after these laws were officially instituted, three commercial and several tribal sportsbooks were launched. Transitioning online took slightly longer due to the slow issuing of licensing by the state. 

In 2021, however, multiple sites, such as the Hollywood online casino in Michigan, were launched. Alongside these online casinos, numerous sportsbooks and poker websites gave access to various other online gambling options. 

The success of these online gambling platforms has been evident. In the first year of online gambling availability, gamblers in the state wagered an impressive $3.7 billion. In 2022, this increased to $4.6 billion, with many expecting the industry to continue growing and evolving as players take advantage of their hard-earned gambling freedoms. 

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