Regulated gambling has been an important contributor to Michigan’s economy since the early 1980s, when the first tribal casinos opened their doors to customers. The local gambling industry has gone from strength to strength over the years, and Michiganians currently have a broad choice of legal wagering options.
Casino gaming, betting on horse races, retail sports wagering, and lotteries all enjoy legal status in the Great Lakes State. Detroit, the biggest city in the state, is home to three commercial casinos, whose gross gaming revenue surpassed $1.2 billion in 2021. Native American gaming is also thriving here, as more than two dozen tribal casinos operate throughout the state.
The local industry expanded further a couple of years ago after the state legislature approved online wagering on sports and online casino gaming. The remote segment was hugely successful from the get-go. Michigan joined the ranks of Pennsylvania and New Jersey, becoming the third high-population state to record online gaming revenue exceeding $1 billion in 2021.
With more than a dozen betting and gaming websites, local online players certainly cannot complain about a lack of legal options. Various measures are in place to maintain probity within the sector and to promote socially responsible behavior among the population. The Michigan Gaming Control Board is responsible for overseeing the local gambling industry and enforces stringent measures to protect both players and industry participants.
Laws That Govern the Michigan Gambling Industry
Several key pieces of legislation govern Michigan’s land-based gambling industry, beginning with the Michigan Gaming Control and Revenue Act, which cleared the way for non-tribal commercial gaming. The Mitten currently hosts three commercial casinos in Detroit and the surrounding area, namely Greektown Casino Hotel, MotorCity Casino Hotel, and MGM Grand Detroit.
The Gaming Control and Revenue Act
The Michigan Penal Code
The Indian Gaming Regulatory Act (IGRA)
The 1972 Lottery Act
The Gaming Control and Revenue Act
Commercial casino gambling arrived in Michigan in late 1996 when residents ratified Proposal E during a referendum in early November. The proposal received approval from 51.5% of voters and took effect one month later as the Michigan Gaming Control and Revenue Act. The legislation authorized the operation of non-tribal casinos in major cities with populations of 800,000 or more.
It allowed for the issuance of up to three gaming licenses within any one major city. Another provision stipulated that commercial casinos could not be located on federally recognized tribal land. Additionally, such casinos could operate only in cities where a majority of voters had approved commercial gaming.
The legislation defines gambling games as those that require the use of dice, cards, electronic, mechanical, or electromechanical devices. Examples cited in the Act include slots, keno, roulette, blackjack, poker, baccarat, craps, and wheel of fortune.
Home card games are excluded from the Act’s scope provided the hosts earn no profit from them. The legislation also excludes pari-mutuel betting on horse races, bingo games, lotteries, and tribal gambling.
Soon after the Act’s passage, lawmakers amended it through Public Act 69 of 1997, which created the Michigan Gaming Control Board (MGCB), the state regulatory agency. Beyond that, the Act details the requirements operators must meet to obtain commercial gaming licenses and explains the application process.
The Michigan Penal Code
Chapter 750 of the Michigan Penal Code covers illegal gambling in sections 301 through 315(a). It defines common gambling houses and sets out the penalties for those who operate or patronize them. Owners or operators of such establishments can face imprisonment or fines.
Individuals who gamble at these locations commit a misdemeanor. Card games played recreationally in retirement homes are not considered illegal gambling as long as participants wager no more than 25¢ and winnings do not exceed $5 per hand.
The Indian Gaming Regulatory Act (IGRA)
Gambling activities on tribal lands are regulated separately under the Indian Gaming Regulatory Act, signed into law by President Ronald Reagan in October 1988. This landmark legislation granted federally recognized tribes the exclusive right to operate and regulate gambling within their reservations in states where such activities are not expressly prohibited.
IGRA distinguishes among three classes of gambling. Class I covers social games played for nominal prizes and traditional games connected to Native American ceremonies and celebrations. Tribes have sole responsibility for regulating these activities.
The Class II category includes bingo games that offer monetary prizes. Card games also fall under this class provided they are not illegal under state law. The Act specifically excludes chemin de fer, blackjack, and baccarat from Class II.
Another provision states that Class II extends to card games that were played in Washington, North Dakota, South Dakota, and Michigan before May 1988. Blackjack and similar games were available in card rooms operated by tribal nations in the Great Lakes State before IGRA took effect. Blackjack and craps were also offered at nonprofit events run by the Charitable Gaming Division of the Michigan Lottery, allowing local tribes to add them to their catalogs.
Finally, Class III covers all games that do not fit into Class I or Class II. Examples include video poker, slots, roulette, and keno, among other games of chance. To offer any of these products, tribes must negotiate compacts with state authorities.
Michigan has entered into such compacts with roughly a dozen tribes, including the Saginaw Chippewa, the Little River Band of Ottawa Indians, and the Keweenaw Bay Indian Community. Most compacts have an initial duration of twenty years, with an option to extend.
The 1972 Lottery Act
Michigan residents gained access to state-operated lotteries after the passage of Public Act 239 of 1972, also known as the McCauley-Traxler-Law-Bowman-McNeely Lottery Act. Although the name is a bit of a mouthful, the Act made a broad range of lottery games available to Michiganders.
Products offered by the Michigan Lottery include scratch cards, pull-tabs, keno, and terminal-based games. Locals also have access to multi-state products like Mega Millions, Lucky for Life, and Powerball. Players can purchase tickets online as long as they are at least 18 years old and physically present within state borders.
Lottery proceeds support the state’s public school system. According to Section 432.12, at least 45% of the lottery’s gross revenue must fund public education programs. Winners may receive larger prizes in installments or as a lump-sum payment.
Individuals under 18 cannot participate, but gifting tickets to minors is not prohibited. If a minor wins, a parent or legal guardian must claim the prize on their behalf. Winners must redeem payouts within one year of the draw.
Those who miss the deadline forfeit their winnings to the public school fund. Distributing counterfeit or forged lottery tickets is a felony punishable by up to five years in prison and/or fines of up to $1,000.
Licensing Process and Requirements
The Michigan Gaming Control and Revenue Act sets out the licensing process and requirements for securing operating permits for commercial casinos. Under Section 432.206, applicants must pay a non-refundable fee when they submit their applications.
Ineligible Applicants for Commercial Gaming Licenses
Public Hearings and Validity
Occupational Licenses for Casino Employees
Tribal Casino Compacts
Ineligible Applicants for Commercial Gaming Licenses
Applicants are ineligible for commercial gaming permits if they have been convicted of a felony in Michigan or any other US state. However, the MGCB may waive this restriction if the conviction occurred more than ten years before the application.
Candidates with convictions for gambling-related misdemeanors, fraud, or theft are also disqualified. Depending on the severity of the offense, the regulator can waive the rule when the conviction is more than five years old.
In all cases, the MGCB must determine that previously convicted applicants pose no threat to the industry’s integrity. State or federal officials in the city where the casino would be located are likewise disqualified. Applicants who have repeatedly failed to meet regulatory or licensing standards in other jurisdictions are likely to be rejected.
Public Hearings and Validity
Businesses seeking commercial permits must submit photographs and fingerprints of key management employees and of shareholders who hold more than a 5% interest in the enterprise. The MGCB reviews each application and conducts a public hearing before issuing a final decision.
The hearings give applicants an opportunity to demonstrate their suitability for licensure. Successful candidates receive commercial casino licenses that are valid for one year. These permits must be renewed annually, provided the casinos pay the required fees.
Each licensee must file an annual report detailing its operations so the MGCB can assess eligibility for renewal. Violations of licensing terms may lead to suspension or revocation. The MGCB may issue no more than three commercial casino licenses.
Occupational Licenses for Casino Employees
Employees who are directly or indirectly involved in gaming must obtain occupational permits before they can work on the casino floor. Applicants must pay a non-refundable fee and demonstrate the experience and integrity required for their positions.
Individuals must be at least 21 years old to perform gambling-related duties on the casino floor. Those not directly involved in gaming must be 18 or older. Three types of occupational licenses are available, depending on the role.
Level 1 permits are required for positions such as casino pit boss, casino manager, poker shift supervisor, slot shift manager, surveillance supervisor, cage manager, and counting room supervisor. Level 2 permits cover dealers, boxpersons, and floorpersons. Waitstaff who handle food and beverages on the gaming floor need Level 3 licenses.
Occupational licenses must be renewed every two years. Employees should submit renewal applications and fees at least thirty days before their licenses expire. Fees are $500 for Level 1, $100 for Level 2, and $50 for Level 3.
Tribal Casino Compacts
At the time of publication, twelve gaming compacts exist between tribal nations and state authorities. These written agreements, signed by the governor, govern Class III gambling offered by sovereign tribes. Michigan signed the first seven compacts in 1993. The following sovereign nations offer Class III gambling services under 1993 compacts:
These 1993 compacts had an initial term of twenty years and were extended for five years once that period elapsed. State authorities have begun negotiating new Class III gaming compacts with these tribes.
Michigan signed four additional gaming compacts in 1998, each lasting twenty years. Three were extended until 2028, while the fourth was prolonged until 2030. The nations involved include:
In 2007, the state entered into another compact with the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, commonly referred to as the Gun Lake Tribe. Like the 1993 agreements, this compact has an initial twenty-year term and will be extended for five more years once it expires.
Responsible Gaming Policies
Commercial casino operators in Michigan can legally offer their products to patrons who meet the minimum age requirement of 21 years. In the interest of responsible gaming, the casinos must post information about problem gambling programs at the entrances and exits, as well as on all electronic payment terminals on their premises.
Under Section 432.212a of the Gaming Control and Revenue Act, $2 million should go toward funding the Compulsive Gaming Prevention Fund. The MGCB maintains a register of Disassociated Persons, which contains the names of all local players who have self-excluded from gaming participation.
Until recently, gambling addicts who applied for exclusion faced a lifetime prohibition on entering local commercial casinos. However, state authorities relaxed their stance a couple of years ago, allowing these individuals to remove themselves from the list after a five-year period.
As for responsible gaming policies at Native American casinos, most compacts do not contain explicit provisions on self-exclusion. Nonetheless, some tribal nations have chosen to offer this option to their patrons. The minimum gambling age is 21 in most tribal casinos, although persons aged 18 and older can participate in Class III gaming under the terms of some 1998 compacts.
Online Gambling Regulations in Michigan
Michigan’s experience with interactive gambling dates back to the late 1990s, when the legislature passed Senate Bill 562 in 1999. The bill barred the use of the internet to violate the state’s anti-gambling laws. Supported by land-based commercial and tribal operators, it was repealed the following year.
Remote gambling remained unregulated until Governor Gretchen Whitmer signed the Lawful Internet Gaming Act and the Lawful Sports Betting Act in late 2019. Lawmakers thus acknowledged the economic and social benefits of regulated online wagering.
Regulated Online Poker and Casino Games
Regulated Sports Betting
Regulated Online Poker and Casino Games
The Lawful Internet Gaming Act allows every licensed gambling operator in Michigan to offer remote poker and casino-style games, and the same applies to sovereign tribal nations with state compacts.
Players in the Mitten now enjoy legal access to slots, blackjack, video poker, roulette, and live-dealer tables. More than a dozen online casinos operate under MGCB licenses, and licensees must renew their interactive gaming permits every five years.
The application fee is $50,000, while the initial license costs $100,000. Suppliers pay $5,000 for their first permit and $2,500 in subsequent years. Online operators face progressive taxes ranging from 20% to 28%, calculated on adjusted gross receipts. Geolocation tools ensure that only players physically located in Michigan can wager on MGCB-licensed sites.
Regulated Sports Betting
Regulated sports betting reached the Great Lakes State with the passage of the Lawful Sports Betting Act. The law permits licensed land-based casinos to offer sports wagering to Michiganders online, through mobile apps, or at retail sportsbooks. Each commercial or tribal casino may operate only one online sportsbook.
The Act does not authorize pari-mutuel wagering on horse races. It also prohibits betting on events involving high school athletes unless most participants are 18 or older. Application and licensing fees mirror those for online poker and casino gaming.
Sports betting revenue is taxed at 9.65% for online sportsbooks operated by commercial casinos and 8.4% for retail or online tribal sportsbooks. Sports betting licenses remain valid for five years.
Who Regulates Gambling in Michigan?
The Michigan Gaming Control Board (MGCB) is the primary regulatory agency that oversees commercial gambling businesses in the Mitten State. The MGCB consists of a governor-appointed executive director, a chairperson, three board members, and four deputy directors responsible for each of the agency’s four divisions (casino operations, administration, licensing and investigations, and online gaming and legal affairs).
Apart from its licensing and oversight functions, the MGCB also has the authority to audit the revenue that tribal casinos generate from the operation of Class III games. The Board supervises commercial casino gaming and horse race betting, while the Michigan Bureau of State Lottery oversees charitable raffles and bingo.
Tribal gambling operators in Michigan are subject to the oversight of the National Indian Gaming Commission (NIGC), founded in 1988 after the passage of the Indian Gaming Regulatory Act (IGRA). The NIGC is an independent oversight entity, but it still works with the U.S. Departments of the Interior and Justice.
It consists of a chairperson and two associate commissioners. The chairperson is appointed by the president of the United States with the approval of the Senate. The Secretary of the Interior selects the associate commissioners. At least two NIGC members must come from federally recognized tribal nations.
Conclusion
Compared to gambling hubs like Nevada and New Jersey, Michigan is a relative latecomer on the U.S. gambling scene. However, the Mitten has quickly caught up and now boasts one of the most developed and lucrative gambling industries in the country. Nearly all forms of betting are legal and adequately regulated here in both retail and digital formats. The sector makes an enormous contribution to state coffers. As of 2021, Michigan collected $209 million in taxes from online gambling sites alone.
