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Pandemic Causes Michigan Regulators To Push For Early Launch Of Online Sports Betting

Thanks To Declining Gaming Revenue, And Ultimately Taxes, Regulators Hoping To Allow Online Books To Open In November

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Michigan rolled out its in-person sports betting operation, opening retails sportsbooks March 11, just a few days before Gov. Gretchen Whitmer shut down the state’s gambling market in response to the COVID-19 pandemic.

Now that brick-and-mortar operations have reopened at 15 percent capacity and revenues are struggling, state regulators are looking to move up the timeline for the launch of its online and mobile platforms, according to a report from MLive.

With Whitmer’s roughly 14-week shutdown, the state’s three commercial casinos in Detroit reported gross gambling revenue of just $487 million from April through July. Those properties reopened August 5 but are still struggling to generate something close to pre-pandemic revenues, which ultimately hurts state coffers.

When Whitmer signed the online gambling bill into law at the end of last year, the state tax rate on internet gambling ranged between 20-28 percent, compared to the 8.4 percent rate put on the brick-and-mortar books.

With the start of the NFL season just a day away, there will almost certainly be a rush to the books by sports bettors. And online sports betting has proven to be the key to any successful sports betting market.

According to numbers released by New Jersey gaming regulators, $296 million of the $315 million wagered on sports in July came from an online sportsbook. That is why Richard Kalm, executive director of the Michigan Gaming Control Board told MLive that he hope to allow sites to launch online books by mid-November.

“We all know that the online portion is going to benefit not only the state and tax revenue, but the tribes took a real hit, too. They got beat up really bad when they closed their casino, and same for the city of Detroit. So everybody wants to get those done sooner than later. There’s been a real spirit of cooperation to move these things through the process.”

There is a public hearing scheduled for September 23, where the rules will be laid out and finalized. The regulators hope to have an economic impact statement finalized and in the hands of state legislators by October.

If all goes smoothly, a mid-November launch would be a few months ahead of the initial January target.