Michigan is one of only a few states that has permitted online gambling for residents over the age of 21. This includes placing bets on sporting events online and playing casino games like poker, slots, and others on platforms like Irish luck casino. Although many locals are obviously excited about this new legislation, its legal and regulatory repercussions are still being determined.
The Lawful Internet Gaming Act of 2019 and the Lawful Sports Betting Act, both of which were passed in the same year, legalized online gambling and sports betting in Michigan.
According to the Michigan Lawful Sports Betting Act of 2019, “internet gaming operators” and “internet gaming platform providers” are subject to licensing and regulation under this new regulatory framework. They are now bound to abide by a number of rules and regulations established by the act and the Internet Gaming Rules. But many are curious about how they are held responsible when there are problems. There are still questions as to who makes the decisions. And how online customers can be assisted when these problems do occur.
Internet Gaming Rule 432.641 establishes a specific process for online gamblers. It enables them to file complaints with internet gaming platform providers and internet gaming operators. This is distinct from the standard “patron complaint” form process. That form is used to file complaints with the Michigan Gaming Control Board (“MGCB”). This is generally used when complaints are made about physical casinos. The iGaming/Online Sports Wagering Dispute Process uses a special Participant Complaint Form. This is a brand-new procedure that differs in a few important ways from the standard procedure.
Michigan Gaming Control Board (MGCB)
A traditional casino patron complaint must be made within 21 days of the incident. The new online gaming operator complaint process does not have this restriction. This means that depending on numerous other conditions and the relevant statute of limitations, online gaming claims may still arise years after the occurrence date. The policy may be related to the nature of the format. Online gaming may allow operators to store digital logs of incidents for far longer than a traditional casino.
After bringing the issue to the notice of the operator or provider, if no resolution is reached, the participant may file a complaint with the MGCB. It is still unclear however as to what powers the MGCB have; especially in the case of a financial reimbursement.
Regarding complaints brought to the MGCB by approved participants, the MGCB appears to have been given vague authority. The board may conduct any investigation the board believes necessary. It can instruct an internet gaming operator or an internet gaming platform provider to implement any remedial action the board considers appropriate.
The MGCB also has the authorities and responsibilities described in this act. It also has all other powers required to enable it to completely and effectively execute this act. The exact nature of their powers is still unclear however.
Does the MGCB have the authority to grant monetary redress to participants in online gaming? If not then it doesn’t have the same powers as a court. Can the Board issue a directive to a gaming operator to change the result of an online gambling game?
Some regulatory agencies, such as the Michigan Tax Tribunal, are given quasi-judicial powers. This gives power to actual courts to deliver such relief. The level of assistance that could be provided for the MGCB, however, is far less definite.
Kraft vs. Detroit Entertainment (2004)
The Michigan Gambling Control and Revenue Act (MGCRA), according to the courts, grants the MGCB “expansive and exclusive authority” to oversee every facet of casino gambling in Michigan. In order to ensure compliance with the law and to safeguard the integrity of casino gaming, the MGCB is responsible for a number of tasks. These include:
- Reviewing applications for casino licenses
- Promulgating rules and regulations to implement and enforce the act;
- Establishing procedures for the imposition and collection of penalties and fines for violations of the act or administrative rules,
- Receiving public complaints
- Conducting investigations into the conduct of gambling operations.
In this instance, the court dismissed the common law allegations of fraud and unjust enrichment on the grounds that they were barred by MCL 432.203. This effectively reaffirmed MGCB’s exclusive authority over certain licensing matters. The MGCB does have a long number of powers, which are outlined in MCL 432.204 and MCL 432.204a. But nowhere in these lists does it state that the MGCB has the authority to require operators and providers to compensate online gaming players or refund them when the operator or provider deprives the player of monetary recompense. Additionally, it is uncertain if MCL 432.204 applies to internet operators and providers in the same way as it does to traditional casinos, and it appears that MCL 432.305 of the Lawful Internet Gaming Act does not.
What recourse do players actually have if the MGCB claims to have expansive and exclusive authority over all areas of casino gambling in Michigan, but lacks the power to reimburse players who lose money due to the negligence of the online operator? The appropriate action against operators and distributors of internet gambling and sports betting is a matter that will need to be resolved in Michigan courts over the next years.