HB-4926, As Passed House, June 12, 2018

SUBSTITUTE FOR

HOUSE BILL NO. 4926

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 a tax

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. (1) The legislature finds that the internet has become

an integral part of everyday life for a significant number of

residents of this state, not only in regard to their professional

lives, but also in regard to personal business and communication.

Internet wagering on games of chance and games of skill is a core

form of entertainment for millions of individuals worldwide. In

multiple jurisdictions across the world, internet gaming is legal,

regulated, and taxed, generating billions of dollars in revenue for

governments.

(2) In an opinion dated September 20, 2011, the United States

Department of Justice reversed its previous interpretation of 18

USC 1084, commonly referred to as the federal wire act, allowing

states, subject to certain restrictions, to legalize and regulate

internet gaming and capture the revenue for the benefit of state

governments.

(3) In order to protect residents of this state who wager on

games of chance or skill through the internet and to capture

revenues and create jobs 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 that complies with the

United States Department of Justice's September 2011 opinion

concerning 18 USC 1084.

(4) The legislature additionally finds that 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.

(5) The legislature additionally finds that this act is

consistent and complies with the state constitution of 1963 by

ensuring that internet gaming only occurs in casinos that are

lawfully operating in this state.

Sec. 3. As used in this act:

(a) "Athletic event" means a sports activity that involves the

athletic skill of 1 or more players or participants. Athletic event

does not include any of the following:

(i) Horse racing.

(ii) College, high school, or other amateur sports.

(iii) Roulette, poker, blackjack, a card game, a dice game, or

any other game or contest typically offered in a casino.

(b) "Authorized participant" means an individual who has a

valid internet wagering account with an internet gaming licensee

and is at least 21 years of age.

under section 4 of the Michigan gaming control and revenue act,

1996 IL 1, MCL 432.204.

(d) "Class III gaming" means that term as defined in 25 USC

2703.

(e) "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.

(f) "Division" means the division of internet gaming

established under section 5.

(g) "Fantasy sports game" means a fantasy or simulation sports

game or contest with a cash or cash equivalent entry fee that meets

all of the following conditions:

(i) The value of all prizes offered to winning game

participants is established and made known to the game participants

in advance of the fantasy sports game and their value is not

determined by the number of game participants or the amount of any

fees paid by the game participants.

(ii) All winning outcomes reflect the relative knowledge and

skill of game participants and are determined predominantly by

accumulated statistical results of the performance of athletes in

real-world athletic events.

(iii) A winning outcome is not based on the score, point

spread, or performance of a single real-world team or any

combination of teams or on any single performance of an individual

athlete in a single athletic event.

(h) "Fund" means the internet gaming fund created under

section 15.

(i) "Gross gaming revenue" means the total of all internet

wagers actually received by an internet gaming licensee licensed by

the division, less the total of all winnings paid out to authorized

participants. As used in this subdivision:

(i) "Prizes" includes both monetary and nonmonetary prizes

received directly or indirectly by an authorized participant from

an internet gaming licensee licensed by the division as a direct or

indirect result of placing an internet wager. The value of a

nonmonetary prize is the actual cost of the prize.

(ii) "Winnings" includes all of the following:

(A) The total amount authorized participants receive as prizes

during the accounting period.

(B) Stakes returned to authorized participants.

accounts, including the monetary value of loyalty points, free

play, and other similar complimentaries and incentives granted to

authorized participants as a result of participation in internet

games.

(j) "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 should be

considered to be an institutional investor for reasons consistent

with this act.

(k) "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.

(l) "Internet game" means a game of skill or chance that is

offered for play through the internet in which a person 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 persons compete

against one another in 1 or more of the games approved by the

division or in approved variations or composites as approved by the

division.

(m) "Internet gaming" means operating, conducting, or offering

for play an internet game.

(n) "Internet gaming licensee" means a person that is issued

an internet gaming license from the division to conduct internet

gaming or is otherwise authorized to conduct internet gaming under

section 7.

(o) "Internet gaming platform" means an integrated system of

hardware, software, and servers through which an internet gaming

licensee conducts internet gaming under this act.

(p) "Internet gaming vendor" means a person that provides to

an internet gaming licensee goods, software, or services that

directly affect the 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 licensee 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.

(q) "Internet wager" means money or something of monetary

value risked on an internet game offered under this act.

(r) "Internet wagering" means the placing of wagers with an

internet gaming licensee using a computer network of both federal

and nonfederal interoperable packet switched data networks through

which the internet gaming licensee may offer internet games to

authorized participants who have established a wagering account

with the internet gaming licensee.

(s) "Internet wagering account" means an electronic ledger in

which all of the following types of transactions relative to the

internet gaming platform are recorded:

(i) Deposits.

(ii) Withdrawals.

(iii) Amounts wagered.

(iv) Amounts paid on winning wagers.

(v) Service or other transaction-related charges authorized by

the authorized participant, if any.

(vi) Adjustments to the account.

(t) "Person" means an individual, partnership, corporation,

association, limited liability company, federally recognized Indian

tribe, or other legal entity. Person does not include this state or

any department or agency of this state.

Sec. 4. (1) Internet gaming may be conducted only to the

extent that it is conducted in accordance with this act. A law that

is inconsistent with this act does not apply to internet gaming as

provided for by this act. This act does not apply to lottery games

offered by the bureau of state lottery either through the internet

or via its online terminal and network systems.

(2) An internet wager received by an internet gaming licensee

is considered to be gambling or gaming that is conducted in the

licensee'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) An internet wager received by a federally recognized

Michigan Indian tribe is considered to be gambling or gaming that

is conducted wholly within that Indian tribe's casino on Indian

tribal lands located in this state, regardless of the authorized

participant's location at the time the participant places the

internet wager.

(4) All internet wagers placed in accordance with this act are

considered placed when received by the internet gaming licensee,

House Bill No. 4926 as amended June 19, 2018

regardless of the authorized participant's location at the time the

participant initiates the wager. Any intermediate routing of

electronic data in connection with a wager, including across state

lines, does not determine the location or locations in which the

wager is initiated, received, or otherwise made, and does not

affect the fact that the wager is considered placed in the internet

gaming licensee's casino.

(5) An internet gaming licensee's primary internet gaming

operation, including facilities, equipment, and personnel who are

directly engaged in the conduct of internet gaming activities, must

be located in a restricted area on the premises of the internet

gaming licensee's casino. Backup equipment may be located outside

the internet gaming licensee's casino, as long as any wager is

placed with the internet gaming licensee on equipment that is

physically located within the internet gaming licensee's casino.

(6) Only an internet gaming licensee at its casino may

aggregate computers or other internet access devices in order to

enable multiple players to simultaneously play an internet game.

Except as provided in this subsection, 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,

in order to enable multiple players to simultaneously play an

internet game.

[(7) An internet gaming licensee licensed by the division shall, on

the internet gaming platform used by the licensee, display in a clear, conspicuous, and accessible manner evidence of the licensee's internet gaming license issued under this act.]

(8] This act does not apply to a fantasy sports game.

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 as provided in

section 9(2) 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 to facilitate, administer, and regulate

multijurisdictional internet gaming by internet gaming licensees 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 an internet gaming licensee

licensed by the division to conduct internet wagering under this

act on any amateur or professional sporting event or contest, if

that internet wagering is not prohibited by federal law.

Sec. 6. (1) The division may issue an internet gaming license

only to a person that holds a casino license under the Michigan

gaming control and revenue act, 1996 IL 1, MCL 432.201 to 432.226.

The division shall issue an internet gaming license to the person

described in this subsection after receiving the application

described in subsection (3) and the application fee if the division

determines that the internet gaming proposed by the person complies

with this act.

(2) 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 standards under this act, is renewable for additional

5-year periods. An internet gaming licensee shall not conduct

internet gaming until 1 year after the date this act is enacted

into law.

(3) A person may apply to the division for an internet gaming

license to offer internet gaming as provided in this act. Subject

to subsection (4), the application must be made on forms provided

by the division and include the information required by the

division, including, but not limited to, all of the following:

(a) Detailed information regarding the ownership and

management of the person.

(b) Detailed personal information regarding the person.

(d) The gaming history and experience of the person in the

United States and other jurisdictions.

(4) A person does not need to provide any information in an

application under subsection (3) that the person has previously

provided to the division unless the division notifies the applicant

that the division cannot locate the previously provided

information.

(5) 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.

(6) 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 a

renewal of an internet gaming license confidential and shall use

that material only to evaluate the application for an internet

gaming license for the license or renewal of the license. 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.

(7) An application under this section must be submitted and

considered in accordance with this act and any rules promulgated

under this act.

(8) An internet gaming licensee licensed by the division shall

pay a license fee of $200,000.00 to the division at the time the

initial license is issued and $100,000.00 each year after the

initial license is issued. The division shall deposit all

application and license fees paid under this act into the fund.

(9) An institutional investor that holds for investment

purposes only less than 30% of the equity of a person applying for

an internet gaming license under this section is exempt from the

licensure requirements of this section.

Sec. 7. (1) A federally recognized Michigan Indian tribe that

operates a casino in this state in which class III gaming is

conducted may conduct internet gaming at that casino under this

act, commencing no sooner than 1 year after the effective date of

this act, if authorized by a compact the tribe has entered into

with this state under the Indian gaming regulatory act, Public Law

100-497, subject to the terms of the compact or amendment, and

requirements of applicable federal law.

(2) With respect to a request for a compact amendment or a new

compact to permit an eligible Indian tribe to conduct internet

gaming under this act, the tribe shall request the amendment or new

compact by letter from the tribal chairperson on behalf of the

tribe to the governor on behalf of this state. The letter described

in this subsection must include proposed terms consistent with this

act.

(3) With respect to a request to authorize an Indian tribe to

conduct internet gaming authorized under this act under the terms

of an existing compact that authorizes the Indian tribe to request

the addition of new class III games with approval by the governor,

the tribe shall request that internet gaming be added as an

additional class III game under the compact.

(4) The governor, on behalf of this state, may negotiate and

enter into a compact, on behalf of this state, with a federally

recognized Indian tribe, that expressly authorizes internet gaming

under this act. The terms of a compact or amendment to a compact

under this subsection must address the following:

(a) The amount and manner of revenue sharing payments to be

made to this state related to internet gaming.

(b) The legal and equitable remedies and process by which this

state may enforce, in federal courts, the terms of the compact or

amendment to a compact, including, but not limited to, the Indian

tribe's agreement to make revenue sharing payments to this state

based on revenues generated by the internet gaming conducted by the

Indian tribe.

that the tribe may only offer for play those internet games that

the division has approved for internet gaming licensees licensed by

the division to offer.

(d) The tribe's commitment to develop and utilize responsible

gaming programs similar to those described in section 12.

(e) The tribe's obligation to develop and utilize financial

standards for internet wagering, internet wagering accounts, and

internet gaming platforms, systems and software, and other

electronic components for internet gaming that are similar to the

standards imposed by the division, or to standards promulgated by

the state of Nevada or the state of New Jersey.

(f) The tribe's obligation to develop and utilize 1 or more

mechanisms designed to reasonably verify that an individual who

desires to wager over the internet gaming platform used by the

tribe is 21 years of age or older.

(g) The tribe's obligation to develop and utilize verification

mechanisms designed to detect and prevent the unauthorized use of

internet wagering accounts and to detect and prevent fraud, money

laundering, and collusion.

(h) The tribe's obligation to ensure that its internet gaming

platform provider, if not tribally owned, is licensed as an

internet gaming vendor under this act.

(i) The tribe's obligation to cease all internet gaming

operations permitted by this act if a court enters a judgment or

order that has the effect of invalidating or otherwise rendering

inoperative section 6(1) or otherwise nullifies the ability of a

person that holds a casino license under the Michigan gaming

control and revenue act, 1996 IL 1, MCL 432.201 to 432.226, to

offer internet gaming under this act.

(j) The tribe's obligation to cease all internet gaming

operations if the tribe ceases operating its casino or the tribe

fails to offer class III games other than internet gaming at its

casino.

(5) The governor shall negotiate in good faith regarding an

eligible Indian tribe's request for a compact amendment or a new

compact under subsection (2). If the governor fails to negotiate

with an Indian tribe or fails to negotiate in good faith with

respect to any request that addresses the provisions set forth in

subsection (4), the Indian tribe may initiate a cause of action in

federal court as authorized under 25 USC 2710(d)(7).

(6) An Indian tribe authorized to conduct internet gaming

under this act pursuant to a compact, or amendment to a compact,

entered into with this state is authorized to become a party to any

multijurisdictional agreement entered into by the division under

section 5(3) of this act and may enter into agreements with other

Indian tribes to facilitate, administer, and regulate

multijurisdictional internet gaming to the extent that the

agreement is consistent with applicable tribe, state and federal

laws, including the Indian gaming regulatory act, Public Law 100-

497, and the unlawful internet gambling enforcement act of 2006,

Public Law 109-347.

Sec. 8. (1) The division may issue an internet gaming vendor

license to a person to provide goods, software, or services to

internet gaming licensees. 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 licensee.

(2) On application by an interested person, the division may

issue a provisional internet gaming vendor license to a person that

applies for an internet gaming vendor license. A provisional

license issued under this subsection allows the person applying for

the internet gaming vendor license to conduct business with an

internet gaming licensee or person applying for an internet gaming

license before the internet gaming vendor license is issued to the

person. 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 standards under this act.

(4) A person may apply to the division to become an internet

gaming vendor licensee as provided in this act and the rules

promulgated under this act.

(5) Subject to subsection (6), an application under this

section must be made on forms provided by the division and include

the information required by the division, including, but not

limited to, all of the following:

(a) Detailed information regarding the ownership and

management of the person applying for the internet gaming vendor

license.

(b) Detailed personal information regarding the person

applying for the internet gaming vendor license.

the internet gaming vendor license.

(d) The gaming history and experience of the person applying

for the internet gaming vendor license.

(6) If the person applying for the internet gaming vendor

license is licensed as a supplier under the Michigan gaming control

and revenue act, 1996 IL 1, MCL 432.201 to 432.226, the person does

not need to provide any information that it has previously provided

to the division unless the division notifies the person that the

division cannot locate the previously provided information.

(7) 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.

(8) 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 licensure as an internet gaming

vendor confidential and use the materials only to evaluate the

application for licensure. 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.

(9) An internet gaming vendor shall pay a license fee of

$5,000.00 to the division at the time an initial license is issued

to the vendor and $2,500.00 each year after the initial license is

issued. An internet gaming platform provider shall pay a license

fee of $100,000.00 to the division at the time the initial license

is issued to the provider and $50,000.00 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 a person applying for

the internet gaming vendor license under this section is exempt

from the licensure requirements of this act.

Sec. 9. (1) Except for internet gaming conducted by an Indian

tribe under a compact or an amendment to a compact described in

section 7, 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 licensees

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.

or rules promulgated under this act.

(d) Provide for the establishment and collection of all

license fees and taxes imposed by this act and the rules

promulgated under this act and the deposit of the fees and taxes

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

licensees licensed by the division and internet gaming vendor

licensees 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 licensee or internet gaming vendor licensee.

(k) Acquire or lease real property and make improvements to

the property and 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, issue cease and desist

orders, and obtain injunctive relief against a person that offers

internet gaming in this state and is not an internet gaming

licensee.

(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 strictly 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. The division shall promulgate rules governing the

licensing, administration, and conduct of internet gaming necessary

to carry out this act within 1 year after the effective date of

this act. The promulgation of emergency rules does not satisfy the

requirement for the promulgation of rules to allow a person to

conduct 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.

(b) The qualifications, standards, and procedures for approval

and licensure by the division of internet gaming licensees and

internet gaming vendor licensees consistent with this act.

(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) Procedures and requirements for the acceptance, by an

internet gaming licensee licensed by the division, of internet

wagers initiated or otherwise made by persons located in other

jurisdictions.

(g) Requirements for multijurisdictional agreements entered

into by the division with other jurisdictions, including

qualifications, standards, and procedures for approval by the

division of vendors providing internet gaming platforms in

connection with the agreements.

Sec. 11. (1) An internet gaming licensee licensed by the

division must provide 1 or more mechanisms on the internet gaming

platform that the licensee 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 a jurisdiction in the United

States in which internet gaming is legal.

(2) An individual who wishes to place an internet wager under

this act must satisfy the verification requirements under

subsection (1) before he or she may establish an internet gaming

account or make an internet wager on an internet game offered by an

internet gaming licensee licensed by the division.

(3) An internet gaming licensee licensed by the division shall

require its internet gaming platform provider to include mechanisms

on the internet gaming platform the internet gaming licensee uses

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 licensee licensed by the division shall

not knowingly authorize any of the following individuals to

establish an internet gaming account or knowingly allow them to

wager on internet games offered by the internet gaming licensee,

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.

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 licensee licensed by the division.

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.

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 licensee, 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 licensee licensed by the division

shall, on the internet gaming platform used by the licensee,

display 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 participants, consisting of both temporary and

permanent self-exclusion for all internet games offered and the

ability for 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 licensee licensed by the division. 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) Except as otherwise authorized in the opinion

described in section 2(2), 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 licensee.

(b) Knowingly make a false statement on an application for a

license to be issued under this act.

authorized representative of the board while under oath.

(2) A person that violates subsection (1) 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

shall bring an action to prosecute a violation of subsection (1),

in the attorney general's or prosecuting attorney's discretion, in

the county in which the violation occurred or in Ingham County.

Sec. 14. (1) A person that receives an internet gaming license

from the division is subject to a tax of 8% on the gross gaming

revenue received by the internet gaming licensee from internet

gaming conducted under this act.

(2) An internet gaming licensee that is subject to subsection

(1) shall pay the tax under subsection (1) on a monthly basis. The

payment for a month is due on the tenth day of the following month.

(3) The tax imposed under this section must be allocated as

follows:

(a) Fifty-five 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 and downtown economic development programs

designed to create jobs in that city.

(iii) Public safety programs such as emergency medical

House Bill No. 4926 as amended June 19, 2018

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) [Thirty-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.]

Sec. 15. (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) 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. 16. (1) If a court enters a final judgment or order that

has the effect of invalidating or otherwise rendering inoperative

section 6(1), or otherwise nullifies the ability of a person that

holds a casino license under the Michigan gaming control and

revenue act, 1996 IL 1, MCL 432.201 to 432.226, to offer internet

gaming under this act, this entire act is inoperable and of no

effect.

(2) If a court holds that a provision of this act, or the

application of a provision of this act to any person or

circumstance, is invalid or inoperative other than as provided in

subsection (1), the validity of the remainder of this act and the

application of the remainder of this act to other persons and

circumstances are not affected, as provided in section 5 of 1846 RS

1, MCL 8.5.

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 House

Bill No. 4927 of the 99th Legislature is enacted into law.