Bill Text: MI SB0186 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Gaming: other; lawful internet gaming act; create. Creates new act.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-03-07 - Referred To Committee On Regulatory Reform [SB0186 Detail]
Download: Michigan-2019-SB0186-Introduced.html
SENATE BILL No. 186
March 7, 2019, Introduced by Senator HERTEL and referred to the Committee on Regulatory Reform.
A bill to create the lawful internet gaming act; to impose
requirements for persons to engage in internet gaming; to create
the division of internet gaming; to provide for the powers and
duties of the division of internet gaming and other state
governmental officers and entities; to impose fees; to impose tax
and other payment obligations on the conduct of licensed internet
gaming; to create the internet gaming fund; to prohibit certain
acts in relation to internet gaming and to prescribe penalties for
those violations; to require the promulgation of rules; and to
provide remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"lawful internet gaming act".
Sec. 2. The legislature finds and declares all of the
following:
(a) Operating, conducting, and offering for play internet
games over the internet involves gaming activity that already
occurs throughout this state.
(b) This act is consistent and complies with the unlawful
internet gambling enforcement act of 2006, 31 USC 5361 to 5367, and
specifically authorizes use of the internet to place, receive, or
otherwise knowingly transmit a bet or wager if that use complies
with this act and rules promulgated under this act.
(c) This act is consistent and complies with the state
constitution of 1963 by ensuring that the internet may be used to
place wagers only on games of skill or chance that may be lawfully
played in this state and that internet gaming is only conducted by
persons who are lawfully operating casinos in this state.
(d) In order to protect residents of this state who wager on
games of chance or skill through the internet and to capture
revenues generated from internet gaming, it is in the best interest
of this state and its citizens to regulate this activity by
authorizing and establishing a secure, responsible, fair, and legal
system of internet gaming.
Sec. 3. As used in this act:
(a) "Authorized participant" means an individual who has a
valid internet wagering account with an internet gaming operator
and is at least 21 years of age.
(b) "Board" means the Michigan gaming control board created
under section 4 of the Michigan gaming control and revenue act,
1996 IL 1, MCL 432.204.
(c) "Casino" means a building or buildings in which gaming is
lawfully conducted under the Michigan gaming control and revenue
act, 1996 IL 1, MCL 432.201 to 432.226, or in which class III
gaming is lawfully conducted by an Indian tribe under a facility
license issued in accordance with a tribal gaming ordinance
approved by the chair of the National Indian Gaming Commission.
(d) "Class II gaming" means that term as defined in 25 USC
2703.
(e) "Class III gaming" means that term as defined in 25 USC
2703.
(f) "Compact" means a tribal-state compact governing the
conduct of gaming activities that is negotiated under the Indian
gaming regulatory act, Public Law 100-497, 102 Stat 2467.
(g) "Division" means the division of internet gaming
established under section 5.
(h) "Fund" means the internet gaming fund created under
section 16.
(i) "Gross gaming revenue" means the total of all internet
wagers received by an internet gaming operator, less the total of
all winnings paid out to authorized participants by the internet
gaming operator, during the accounting period. For purposes of this
subdivision, internet wagers received by an internet gaming
operator do not include the monetary value of free play used by
authorized participants.
(j) "Indian lands" means that term as defined in 25 USC 2703.
(k) "Indian tribe" means that term as defined in 25 USC 2703
and any instrumentality, political subdivision, or other legal
entity through which an Indian tribe operates its existing casino.
(l) "Institutional investor" means a person that is any of the
following:
(i) A retirement fund administered by a public agency for the
exclusive benefit of federal, state, or local public employees.
(ii) An employee benefit plan or pension fund that is subject
to the employee retirement income security act of 1974, Public Law
93-406.
(iii) An investment company registered under the investment
company act of 1940, 15 USC 80a-1 to 80a-64.
(iv) A collective investment trust organized by a bank under
12 CFR part 9.
(v) A closed end investment trust.
(vi) A chartered or licensed life insurance company or
property and casualty insurance company.
(vii) A chartered or licensed financial institution.
(viii) An investment advisor registered under the investment
advisers act of 1940, 15 USC 80b-1 to 80b-21.
(ix) Any other person that the division determines through
rulemaking should be considered to be an institutional investor for
reasons consistent with this act.
(m) "Internet" means the international computer network of
interoperable packet-switched data networks, inclusive of such
additional technological platforms as mobile, satellite, and other
electronic distribution channels approved by the division.
(n) "Internet game" means a game of skill or chance that is
offered for play through the internet in which an individual wagers
money or something of monetary value for the opportunity to win
money or something of monetary value. For purposes of this
definition, free plays or extended playing time that is won on a
game of skill or chance that is offered through the internet is not
something of monetary value. Internet game includes gaming
tournaments conducted via the internet in which individuals compete
against one another in 1 or more of the games authorized by the
division or in approved variations or composites as authorized by
the division.
(o) "Internet gaming" means operating, conducting, or offering
for play an internet game.
(p) "Internet gaming operator" means a person that is issued
an internet gaming license from the division to operate, conduct,
or offer internet gaming.
(q) "Internet gaming platform" means an integrated system of
hardware, software, and servers through which an internet gaming
operator operates, conducts, or offers internet gaming.
(r) "Internet gaming vendor" means a person that provides to
an internet gaming operator goods, software, or services that
directly affect wagering, play, and results of internet games
offered under this act, including goods, software, or services
necessary to the acceptance, operation, administration, or control
of internet wagers, internet games, internet wagering accounts, or
internet gaming platforms. Internet gaming vendor does not include
a person that provides to an internet gaming operator only such
goods, software, or services that it also provides to others for
purposes not involving internet gaming, including, but not limited
to, a payment processor or a geolocation service provider.
(s) "Internet wager" means money or something of monetary
value risked on an internet game.
(t) "Internet wagering" means risking money or something of
monetary value on an internet game.
(u) "Internet wagering account" means an electronic ledger in
which all of the following types of transactions relative to an
authorized participant are recorded:
(i) Deposits.
(ii) Withdrawals.
(iii) Internet wagers.
(iv) Monetary value of prizes.
(v) Service or other transaction-related charges authorized by
the authorized participant, if any.
(vi) Adjustments to the account.
(v) "Person" means an individual, partnership, corporation,
association, limited liability company, Indian tribe, or other
legal entity.
(w) "Prizes" includes both monetary and nonmonetary prizes
received directly or indirectly by an authorized participant from
an internet gaming operator as a direct or indirect result of
internet wagering. The value of a nonmonetary prize is the actual
cost of the prize.
(x) "Winnings" includes all of the following:
(i) The total monetary value of prizes received by authorized
participants.
(ii) Stakes returned to authorized participants.
(iii) Other amounts credited to authorized participants'
internet wagering accounts, including the monetary value of loyalty
points, and other similar complimentaries and incentives, not
including free play, granted to authorized participants as a result
of participation in internet games.
Sec. 4. (1) Internet gaming may be conducted only to the
extent that it is conducted in accordance with this act.
(2) An internet wager received by an internet gaming operator
is considered to be gambling or gaming that is conducted in the
internet gaming operator's casino located in this state, regardless
of the authorized participant's location at the time the
participant initiates or otherwise places the internet wager.
(3) A law that is inconsistent with this act does not apply to
internet gaming as provided for by this act.
(4) This act does not apply to any of the following:
(a) Lottery games offered by the bureau of lottery under the
McCauley-Traxler-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.1
to 432.47.
(b) Class II and Class III gaming conducted exclusively on
Indian lands by an Indian tribe under a facility license issued in
accordance with a tribal gaming ordinance approved by the chair of
the National Indian Gaming Commission. For purposes of this
subdivision, gaming is conducted exclusively on Indian lands only
if the individual who places the wager is physically present on
Indian lands when the wager is initiated and the wager is received
or otherwise made on equipment that is physically located on those
Indian lands, and the wager is initiated, received, or otherwise
made in conformity with the safe harbor requirements described in
31 USC 5362(10)(C).
(c) A fantasy contest conducted under the fantasy contests
consumer protection act.
(5) Unless licensed as an internet gaming operator under this
act, a person shall not aggregate computers or other internet
access devices in a place of public accommodation in this state,
including a club or other association, to enable multiple players
to simultaneously play an internet game.
(6) For purposes of this act, the intermediate routing of
electronic data in connection with internet wagering, including
routing across state lines, does not determine the location or
locations in which the wager is initiated, received, or otherwise
made.
Sec. 5. (1) The division of internet gaming is established in
the board. The division has the powers and duties specified in this
act and all other powers necessary to enable it to fully and
effectively execute this act to administer, regulate, and enforce
the system of internet gaming established by this act.
(2) The division has jurisdiction over every person licensed
by the division and may take enforcement action against a person
that is not licensed by the division that offers internet gaming in
this state.
(3) The division may enter into agreements with other
jurisdictions, including Indian tribes, to facilitate, administer,
and regulate multijurisdictional internet gaming by internet gaming
operators to the extent that entering into the agreement is
consistent with state and federal laws and if the gaming under the
agreement is conducted only in the United States.
(4) The division may permit internet gaming operators licensed
by the division to accept internet wagers under this act on any
amateur or professional sporting event or contest.
Sec. 6. (1) The division may issue an internet gaming license
only to an applicant that is either of the following:
(a) A person that holds a casino license under the Michigan
gaming control and revenue act, 1996 IL 1, MCL 432.201 to 432.226.
(b) An Indian tribe that lawfully conducts class III gaming in
a casino located in this state under a facility license issued in
accordance with a tribal gaming ordinance approved by the chair of
the National Indian Gaming Commission.
(2) The division shall issue an internet gaming license to an
applicant described in subsection (1) after receiving the
application described in subsection (4) or (5), as applicable, and
the application fee, if the division determines that the internet
gaming proposed by the applicant complies with this act and the
applicant is otherwise eligible and suitable. An applicant is
eligible if it meets the requirements set forth in subsection
(1)(a) or (b). It is the burden of the applicant to establish by
clear and convincing evidence its suitability as to character,
reputation, integrity, business probity, and financial ability. The
application or enforcement of this subsection by the division must
not be arbitrary, capricious, or contradictory to the express
provisions of this act. In evaluating the eligibility and
suitability of an applicant under the standards provided in this
act, the division shall establish and apply the standards to each
applicant in a consistent and uniform manner. In determining
whether to grant a license to an applicant, the division may
request and consider any or all of the following information from
the applicant as a factor in the determination:
(a) Whether the applicant has adequate capitalization and the
financial ability and the means to develop, construct, operate, and
maintain the proposed internet gaming platform and to offer and
conduct internet gaming in accordance with this act and the rules
promulgated by the division.
(b) Whether the applicant has the financial ability to
purchase and maintain adequate liability and casualty insurance and
to provide an adequate surety bond.
(c) Whether the applicant has adequate capitalization and the
financial ability to responsibly pay off its secured and unsecured
debts in accordance with its financing agreements and other
contractual obligations.
(d) Whether the applicant has a history of material
noncompliance with casino or casino-related licensing requirements
or compacts with this state or any other jurisdiction, where the
noncompliance resulted in enforcement action by the body having
jurisdiction over the applicant.
(e) Whether the applicant has been indicted for, charged with,
arrested for, or convicted of, pleaded guilty or nolo contendere
to, forfeited bail concerning, or had expunged any criminal offense
under the laws of any jurisdiction, either felony or misdemeanor,
not including traffic violations, regardless of whether the offense
has been expunged, pardoned, or reversed on appeal or otherwise.
The division may consider mitigating factors, and, for an applicant
described in subsection (1)(b), shall give deference to whether the
applicant has otherwise met the requirements of the applicant's
gaming compact for licensure, as applicable.
(f) Whether the applicant has filed, or had filed against it,
a proceeding for bankruptcy or has ever been involved in any formal
process to adjust, defer, suspend, or otherwise work out the
payment of any debt.
(g) Whether the applicant has a history of material
noncompliance with any regulatory requirements in this state or any
other jurisdiction where the noncompliance resulted in an
enforcement action by the regulatory agency having jurisdiction
over the applicant.
(h) Whether at the time of application the applicant is a
defendant in litigation involving the integrity of its casino
business practices.
(3) An internet gaming license issued under this act is valid
for the 5-year period after the date of issuance and, if the
division determines that the licensee continues to meet the
eligibility and suitability standards under this act, is renewable
for additional 5-year periods.
(4) A person described in subsection (1)(a) may apply to the
division for an internet gaming license to offer internet gaming as
provided in this act. The application must be made on forms
provided by the division and include the information required by
the division.
(5) A person described in subsection (1)(b) may apply to the
division for an internet gaming license to offer internet gaming as
provided in this act. The application must be made on forms
provided by the division that require only the following
information:
(a) The name and location of any of the applicant's casinos.
(b) The tribal law, charter, or any other organizational
document of the applicant and other governing documents under which
the applicant operates any of its casinos.
(c) Detailed information about the primary management
officials of the applicant's casinos who will have management
responsibility for the applicant's internet gaming operations.
(d) The current facility license for the applicant's casinos.
(e) The applicant's current tribal gaming ordinance.
(f) The gaming history and experience of the applicant in the
United States and other jurisdictions.
(g) Financial information, including copies of the last
independent audit and management letter submitted by the applicant
to the National Indian Gaming Commission under 25 USC 2710(b)(2)(C)
and (D) and 25 CFR parts 271.12 and 271.13.
(h) The total number of gaming positions, including, but not
limited to, electronic gaming devices and table games, at each of
the applicant's casinos.
(6) An initial application for an internet gaming license must
be accompanied by an application fee of $100,000.00. The rules
promulgated under section 10 may include provisions for the refund
of an application fee, or the portion of an application fee that
has not been expended by the division in processing the
application, and the circumstances under which the fee will be
refunded.
(7) The division shall keep all information, records,
interviews, reports, statements, memoranda, or other data supplied
to or used by the division in the course of its review or
investigation of an application for an internet gaming license or
renewal of an internet gaming license confidential and shall use
that material only to evaluate the applicant for an internet gaming
license or renewal. The materials described in this subsection are
exempt from disclosure under section 13 of the freedom of
information act, 1976 PA 442, MCL 15.243.
(8) An application under this section must be submitted and
considered in accordance with this act and any rules promulgated
under this act.
(9) An internet gaming operator shall pay a license fee of
$200,000.00 to the division at the time the initial internet gaming
license is issued and $100,000.00 each year after the initial
license is issued.
(10) The division shall deposit all application and license
fees paid under this act into the fund.
(11) An institutional investor that holds for investment
purposes only less than 30% of the equity of an applicant under
this section is exempt from the licensure requirements of this act.
Sec. 7. (1) The division shall condition the issuance,
maintenance, and renewal of an internet gaming license to a person
described in section 6(1)(b) on the person's compliance with all of
the following conditions:
(a) The person complies with this act and rules promulgated by
the division pertaining to all of the following:
(i) The types of and rules for playing internet games that
internet gaming operators may offer under this act.
(ii) Technical standards, procedures, and requirements for the
acceptance, by the person, of internet wagers initiated or
otherwise made by individuals located in this state who are not
physically present on the person's Indian lands in this state at
the time the wager is initiated or otherwise made.
(iii) Procedures and requirements for the acceptance, by the
person, of internet wagers initiated or otherwise made by
individuals located in other jurisdictions, if the division
authorizes multijurisdictional gaming as provided in this act.
(iv) Those requirements set forth in section 11.
(b) The person adopts and maintains technical standards for
internet gaming platforms, systems, and software that are
consistent with the standards adopted by the division under section
10.
(c) The person maintains 1 or more mechanisms on the internet
gaming platform utilized by the person that are designed to
reasonably verify that an authorized participant is 21 years of age
or older and that internet wagering is limited to transactions that
are initiated and received or otherwise made by an authorized
participant located in this state or, if the division authorizes
multijurisdictional internet gaming as provided in this act,
another jurisdiction in the United States authorized by the
multijurisdictional agreement.
(d) The person adopts and maintains responsible gaming
measures consistent with those described in section 12.
(e) The person continues to maintain and operate in this state
a casino offering class III gaming and the casino contains not less
than 50% of the gaming positions that were in place as of the
effective date of this act.
(f) The person pays to this state 8% of the gross gaming
revenue received by that person from all internet gaming it
conducts under this act as an internet gaming operator, and the
person makes the payments within the time period described in
section 14(2).
(g) The person agrees to and timely provides, on written
request of the division, books and records directly related to its
internet gaming operations for the purpose of permitting the
division to verify the calculation of the payments under
subdivision (f).
(h) The person provides a waiver of sovereign immunity to the
division for the sole and limited purpose of consenting to both of
the following:
(i) The jurisdiction of the division to the extent necessary
and for the limited purpose of providing a mechanism for the
division to do all of the following:
(A) Issue, renew, and revoke the person's internet gaming
license.
(B) Enforce the payment obligations set forth in this section
and section 14.
(C) Regulate and enforce the provisions of this act described
in sections 10(a), (b), (d) to (g), 11, 12(4) and (5), and 13.
(D) Inspect the person's internet gaming operation and records
to verify that the person is conducting its internet gaming
operation in conformity with the conditions prescribed in this
section.
(E) Assess fines or monetary penalties for violations of the
provisions or rules referred to in sub-subparagraph (C).
(F) Enforce the payment of internet gaming license fees
described in section 6(9).
(ii) The exclusive jurisdiction of the courts of this state,
and expressly waiving the exhaustion of tribal remedies, with venue
in Ingham County, and any courts to which appeals from that venue
may be taken, to permit the state to enforce administrative orders
of the division, the person's obligation to make payments required
under subdivision (f) and section 14, and to enforce collection of
the judgments. Any judgment of monetary damages under this
subparagraph is deemed limited recourse obligations of the person
and does not impair any trust or restricted income or assets of the
person.
(2) This state, acting through the governor, shall, at the
request of any Indian tribe, negotiate any amendments to an Indian
tribe's compact necessary to ensure compliance with this act and
any applicable federal laws. If the governor fails to enter into
negotiations with any Indian tribe, or fails to negotiate in good
faith with respect to any request, the Indian tribe may initiate a
cause of action against the governor in his or her official
capacity in either state court or in federal court and obtain those
remedies as authorized in 25 USC 2710(d)(7).
(3) The division must exercise its limited direct regulatory
and enforcement authority in a manner that is not arbitrary,
capricious, or contradictory to this act. Notwithstanding anything
in this act to the contrary, this act only regulates internet
gaming as provided in this act and does not extend to the division,
or any other agency of this state, any jurisdiction or regulatory
authority over any aspect of any gaming operations of an Indian
tribe described in section 4(4)(b) beyond those rights granted to
this state under the compact with the Indian tribe.
Sec. 8. (1) The division may issue an internet gaming vendor
license to a person to provide goods, software, or services to
internet gaming operators. A person that is not licensed under this
section shall not provide goods, software, or services as an
internet gaming vendor to an internet gaming operator.
(2) On application by an interested person, the division may
issue a provisional internet gaming vendor license to an applicant
for an internet gaming vendor license. A provisional license issued
under this subsection allows the applicant for the internet gaming
vendor license to conduct business with an internet gaming operator
before the internet gaming vendor license is issued to the
applicant. A provisional license issued under this subsection
expires on the date provided in the license by the division.
(3) An internet gaming vendor license issued under subsection
(1) is valid for the 5-year period after the date of issuance. An
internet gaming vendor license is renewable after the initial 5-
year period for additional 5-year periods if the division
determines that the internet gaming vendor continues to meet the
eligibility and suitability standards under this act.
(4) A person may apply to the division for an internet gaming
vendor license as provided in this act and the rules promulgated
under this act.
(5) Except as otherwise provided in this section, an
application under this section must be made on forms provided by
the division and include the information required by the division.
An Indian tribe that submits an application under this section
shall provide only the information described in section 6(5).
(6) An application under this section must be accompanied by a
nonrefundable application fee in an amount to be determined by the
division, not to exceed $5,000.00.
(7) The division shall keep all information, records,
interviews, reports, statements, memoranda, or other data supplied
to or used by the division in the course of its review or
investigation of an application for an internet gaming vendor
license or renewal of an internet gaming vendor license
confidential and shall use that material only to evaluate the
applicant for an internet gaming vendor license or renewal. The
materials described in this subsection are exempt from disclosure
under section 13 of the freedom of information act, 1976 PA 442,
MCL 15.243.
(8) Except as otherwise provided in this subsection, an
internet gaming vendor shall pay a license fee of $5,000.00 to the
division at the time an initial internet gaming vendor license is
issued to the internet gaming vendor and $2,500.00 each year after
the initial license is issued. An internet gaming vendor that
provides to an internet gaming operator all or substantially all of
an internet gaming platform shall pay a license fee of $100,000.00
to the division at the time the initial license is issued to the
vendor and $50,000.00 each year after the initial license is
issued.
(9) The division shall deposit all application and license
fees paid under this act into the fund.
(10) An institutional investor that holds for investment
purposes only less than 30% of the equity of an applicant under
this section is exempt from the licensure requirements of this act.
Sec. 9. (1) The division has jurisdiction over and shall
supervise all internet gaming operations governed by this act. The
division may do anything necessary or desirable to effectuate this
act, including, but not limited to, all of the following:
(a) Develop qualifications, standards, and procedures for
approval and licensure by the division of internet gaming operators
and internet gaming vendors.
(b) Decide promptly and in reasonable order all license
applications and approve, deny, suspend, revoke, restrict, or
refuse to renew internet gaming licenses and internet gaming vendor
licenses. A party aggrieved by an action of the division denying,
suspending, revoking, restricting, or refusing to renew a license
may request a contested case hearing before the division. A request
for hearing under this subdivision must be made to the division in
writing within 21 days after service of notice of the action by the
division.
(c) Conduct all hearings pertaining to violations of this act
or rules promulgated under this act.
(d) Provide for the establishment and collection of all
applicable license fees, taxes, and payments imposed by this act
and the rules promulgated under this act and the deposit of the
applicable fees, taxes, and payments into the fund.
(e) Develop and enforce testing and auditing requirements for
internet gaming platforms, internet wagering, and internet wagering
accounts.
(f) Develop and enforce requirements for responsible gaming
and player protection, including privacy and confidentiality
standards and duties.
(g) Develop and enforce requirements for accepting internet
wagers.
(h) Adopt by rule a code of conduct governing division
employees that ensures, to the maximum extent possible, that
persons subject to this act avoid situations, relationships, or
associations that may represent or lead to an actual or perceived
conflict of interest.
(i) Develop and administer civil fines for internet gaming
operators and internet gaming vendors that violate this act or the
rules promulgated under this act. A fine imposed under this
subdivision must not exceed $5,000.00 per violation.
(j) Audit and inspect, on reasonable notice, books and records
relevant to internet gaming operations, internet wagers, internet
wagering accounts, internet games, or internet gaming platforms,
including, but not limited to, the books and records regarding
financing and accounting materials held by or in the custody of an
internet gaming operator or internet gaming vendor.
(k) Acquire by lease or by purchase personal property,
including, but not limited to, any of the following:
(i) Computer hardware.
(ii) Mechanical, electronic, and online equipment and
terminals.
(iii) Intangible property, including, but not limited to,
computer programs, software, and systems.
(2) The division may investigate and may issue cease and
desist orders and obtain injunctive relief against a person that is
not licensed by the division that offers internet gaming in this
state.
(3) The division shall keep all information, records,
interviews, reports, statements, memoranda, and other data supplied
to or used by the division in the course of any investigation of a
person licensed under this act confidential and shall use that
material only for investigative purposes. The materials described
in this subsection are exempt from disclosure under section 13 of
the freedom of information act, 1976 PA 442, MCL 15.243.
Sec. 10. Within 1 year after the effective date of this act,
the division shall promulgate rules governing the licensing,
administration, and conduct of internet gaming under this act. The
division shall promulgate the rules pursuant to the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The
rules may include only things expressly authorized by this act,
including all of the following:
(a) The types of internet games to be offered, which must
include, but need not be limited to, poker, blackjack, cards,
slots, and other games typically offered at a casino.
(b) The qualifications, standards, and procedures for approval
and licensure by the division of internet gaming operators and
internet gaming vendors consistent with this act.
(c) Requirements to ensure responsible gaming.
(d) Technical and financial standards for internet wagering,
internet wagering accounts, and internet gaming platforms, systems,
and software or other electronic components integral to offering
internet gaming.
(e) Procedures for conducting contested case hearings under
this act.
(f) Requirements for multijurisdictional agreements entered
into by the division with other jurisdictions, including
qualifications, standards, and procedures for approval by the
division of internet gaming vendors providing internet gaming
platforms in connection with the agreements.
(g) Procedures and requirements for the acceptance, by an
internet gaming operator, of internet wagers initiated or otherwise
made by persons located in other jurisdictions, if the division
authorizes multijurisdictional gaming as provided in this act.
Sec. 11. (1) An internet gaming operator shall require the
internet gaming vendor providing its internet gaming platform to
provide 1 or more mechanisms on the internet gaming platform that
the internet gaming operator uses that are designed to reasonably
verify that an authorized participant is 21 years of age or older
and that internet wagering is limited to transactions that are
initiated and received or otherwise made by an authorized
participant located in this state or, if the division authorizes
multijurisdictional internet gaming as provided in this act,
another jurisdiction in the United States authorized by the
multijurisdictional agreement.
(2) An individual who wishes to place an internet wager under
this act must satisfy the verification requirements under
subsection (1) before the individual may establish an internet
wagering account or make an internet wager on an internet game
offered by an internet gaming operator.
(3) An internet gaming operator shall require the internet
gaming vendor providing its internet gaming platform to include
mechanisms on its internet gaming platform that are designed to
detect and prevent the unauthorized use of internet wagering
accounts and to detect and prevent fraud, money laundering, and
collusion.
(4) An internet gaming operator shall not knowingly authorize
any of the following individuals to establish an internet wagering
account or knowingly allow them to wager on internet games offered
by the internet gaming operator, except if required and authorized
by the division for testing purposes or to otherwise fulfill the
purposes of this act:
(a) An individual who is less than 21 years old.
(b) An individual whose name appears in the division's
responsible gaming database.
(5) An internet gaming operator shall require the internet
gaming vendor providing its internet gaming platform to display, on
the internet gaming platform used by the internet gaming operator,
in a clear, conspicuous, and accessible manner evidence of the
internet gaming operator's internet gaming license issued under
this act.
(6) An internet gaming operator shall not conduct internet
gaming until 1 year after the effective date of this act.
Sec. 12. (1) The division may develop responsible gaming
measures, including a statewide responsible gaming database
identifying individuals who are prohibited from establishing an
internet wagering account or participating in internet gaming
offered by an internet gaming operator. The executive director of
the board may place an individual's name in the responsible gaming
database if any of the following apply:
(a) The individual has been convicted in any jurisdiction of a
felony, a crime of moral turpitude, or a crime involving gaming.
(b) The individual has violated this act or another gaming-
related law.
(c) The individual has performed an act or has a notorious or
unsavory reputation such that the individual's participation in
internet gaming under this act would adversely affect public
confidence and trust in internet gaming.
(d) The individual's name is on a valid and current exclusion
list maintained by this state or another jurisdiction in the United
States.
(2) The division may promulgate rules for the establishment
and maintenance of the responsible gaming database.
(3) An internet gaming operator, in a format specified by the
division, may provide the division with names of individuals to be
included in the responsible gaming database.
(4) An internet gaming operator shall require the internet
gaming vendor providing its internet gaming platform to display, on
the internet gaming platform used by the internet gaming operator,
in a clear, conspicuous, and accessible manner the number of the
toll-free compulsive gambling hotline maintained by this state and
offer responsible gambling services and technical controls to
authorized participants, consisting of both temporary and permanent
self-exclusion for all internet games offered and the ability for
authorized participants to establish their own periodic deposit and
internet wagering limits and maximum playing times.
(5) An authorized participant may voluntarily prohibit himself
or herself from establishing an internet wagering account with an
internet gaming operator. The division may incorporate the
voluntary self-exclusion list into the responsible gaming database
and maintain both the self-exclusion list and the responsible
gaming database in a confidential manner.
(6) The self-exclusion list and responsible gaming database
established under this section are exempt from disclosure under
section 13 of the freedom of information act, 1976 PA 442, MCL
15.243.
Sec. 13. (1) A person shall not do any of the following:
(a) Offer internet gaming for play in this state if the person
is not an internet gaming operator unless exempt from this act
under section 4(4).
(b) Knowingly make a false statement on an application for a
license to be issued under this act.
(c) Knowingly provide false testimony to the board or an
authorized representative of the board while under oath.
(2) A person that violates subsection (1)(a) is guilty of a
felony punishable by imprisonment for not more than 10 years or a
fine of not more than $100,000.00, or both.
(3) The division shall not issue a license under this act to a
person that violates subsection (1).
(4) The attorney general or a county prosecuting attorney may
bring an action to prosecute a violation of subsection (1)(a) in
the county in which the violation occurred or in Ingham County.
Sec. 14. (1) Except for an internet gaming operator that is an
Indian tribe, an internet gaming operator is subject to a tax of 8%
on the gross gaming revenue received by the internet gaming
operator. An internet gaming operator that is an Indian tribe is
subject to the payment requirements under section 7(1)(f).
(2) An internet gaming operator shall pay the tax or payment,
as applicable, under subsection (1) on a monthly basis. The payment
for each monthly accounting period is due on the tenth day of the
following month.
(3) No other tax, payment, or fee may be imposed on an
internet gaming operator by this state or a political subdivision
of this state for internet gaming conducted under this act. This
subsection does not impair the contractual rights under an existing
development agreement between a city and an internet gaming
operator that holds a casino license under the Michigan gaming
control and revenue act, 1996 IL 1, MCL 432.201 to 432.226.
(4) In addition to payment of the tax and other fees as
provided in this act, and to any payment required pursuant to an
existing development agreement described in subsection (3), if a
city has imposed a municipal services fee equal to 1.25% on a
casino licensee, the city shall charge a 1.25% fee on the gross
gaming revenues of an internet gaming operator that holds a casino
license under the Michigan gaming control and revenue act, 1996 IL
1, MCL 432.201 to 432.226, whose casino is in that city.
Sec. 15. (1) The tax imposed under section 14 must be
allocated as follows:
(a) Thirty percent to the city in which the internet gaming
licensee's casino is located, for use in connection with the
following:
(i) The hiring, training, and deployment of street patrol
officers in that city.
(ii) Neighborhood development programs designed to create jobs
in that city with a focus on blighted neighborhoods.
(iii) Public safety programs such as emergency medical
services, fire department programs, and street lighting in that
city.
(iv) Anti-gang and youth development programs in that city.
(v) Other programs that are designed to contribute to the
improvement of the quality of life in that city.
(vi) Relief to the taxpayers of the city from 1 or more taxes
or fees imposed by the city.
(vii) The costs of capital improvements in that city.
(viii) Road repairs and improvements in that city.
(b) Fifty-five percent to the state to be deposited in the
fund.
(c) Five percent to be deposited in the state school aid fund
established under section 11 of article IX of the state
constitution of 1963.
(d) Five percent to be deposited in the Michigan
transportation fund created under section 10 of 1951 PA 51, MCL
247.660, to be disbursed as provided in section 10(1)(l) of 1951 PA
51, MCL 247.660.
(e) Five percent to the Michigan agriculture equine industry
development fund created under section 20 of the horse racing law
of 1995, 1995 PA 279, MCL 431.320. However, if the 5% allocated
under this subdivision to the Michigan agriculture equine industry
development fund created under section 20 of the horse racing law
of 1995, 1995 PA 279, MCL 431.320, exceeds $3,000,000.00 in a
fiscal year, the amount in excess of $3,000,000.00 must be
allocated and deposited in the fund created under section 16.
(2) By December 31, 2020 and each December 31 after that date,
if the combined amount of money received in the preceding fiscal
year by the city in which the internet gaming operator licensee's
casino is located from money allocated under subsection (1)(a) and
from the wagering tax allocated under section 12(3) of the Michigan
gaming control and revenue act, 1996 IL 1, MCL 432.212, is less
than $179,000,000.00, the board shall distribute from the fund to
the city in which the internet gaming operator licensee's casino is
located an amount equal to the difference between $179,000,000.00
and the combined amount of money the city in which the internet
gaming operator licensee's casino is located received in the
preceding fiscal year from money allocated under subsection (1)(a)
and from the wagering tax allocated under section 12(3) of the
Michigan gaming control and revenue act, 1996 IL 1, MCL 432.212.
However, the total amount the city in which the internet gaming
operator licensee's casino is located receives for the preceding
fiscal year under subsection (1)(a) and this subsection must not be
more than 55% of the total tax imposed under section 14 in the
fiscal year.
Sec. 15a. Any payments under section 7(1)(f) must be allocated
as follows:
(a) Seventy-five percent to this state to be deposited in the
fund.
(b) Twenty-five percent to the Michigan strategic fund created
under section 5 of the Michigan strategic fund act, 1984 PA 270,
MCL 125.2005.
Sec. 16. (1) The internet gaming fund is created in the state
treasury.
(2) The state treasurer may receive money or other assets
required to be paid into the fund under this act or from any other
source for deposit into the fund. The state treasurer shall direct
the investment of the fund. The state treasurer shall credit to the
fund interest and earnings from fund investments.
(3) The board is the administrator of the fund for auditing
purposes.
(4) Except as otherwise provided in section 15(2), the board
shall expend money from the fund, on appropriation, for all of the
following:
(a) Each year, $1,000,000.00 to the compulsive gaming
prevention fund created in section 3 of the compulsive gaming
prevention act, 1997 PA 70, MCL 432.253.
(b) The board's costs of regulating and enforcing internet
gaming under this act.
Sec. 17. This act does not authorize the construction or
operation of a casino that was not constructed or operating before
the effective date of this act.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.
Enacting section 2. This act does not take effect unless
Senate Bill No. 190
of the 100th Legislature is enacted into law.
