SENATE BILL No. 203

 

 

March 1, 2017, Introduced by Senators KOWALL, JONES, WARREN, KNOLLENBERG, HERTEL and JOHNSON 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 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.


     Sec. 3. As used in this act:

 

     (a) "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.

 

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

 

established under section 5.

 

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

 

section 15.

 

     (f) "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.

 

     (C) Other amounts credited 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.

 

     (g) "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.

 

     (h) "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.

 

     (i) "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 authorized by the

 

division or in approved variations or composites as authorized by

 

the division.

 

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

 

for play an internet game.

 

     (k) "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.

 

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

 

hardware, software, and servers through which an internet gaming

 

licensee conducts internet gaming under this act.

 

     (m) "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

 

authorized, conducted, and played 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.

 

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

 

value risked on an internet game authorized by this act.

 

     (o) "Internet wagering" means risking money or something of

 

monetary value on an internet game authorized by this act.

 

     (p) "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.

 

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

 

association, limited liability company, federally recognized Indian

 

tribe, or other legal entity.


     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.

 

     (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

 

places the internet wager.

 

     (3) 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.

 

     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

 

licensed by the division 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 shall not authorize, administer, or otherwise

 

license a person to conduct internet wagering on any amateur or

 

professional sporting event or contest, unless doing so is

 

consistent with state and federal laws.

 

     (5) 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. 6. (1) The division may issue an internet gaming license

 

to a person that applies for the license if the division determines

 

that the applicant is eligible for an internet gaming license under

 

this act and the rules promulgated under this act. If the applicant

 

holds a casino license under the Michigan gaming control and

 

revenue act, 1996 IL 1, MCL 432.201 to 432.226, the division shall

 

consider the applicant to be eligible for an internet gaming

 

license under this act, and the division shall issue an internet

 

gaming license to the applicant after receiving the application and

 

the application fee if the division determines that the internet

 

gaming proposed by the applicant 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.

 

     (3) The division shall only issue an internet gaming license

 

to a person that is 1 of the following:

 

     (a) A casino licensee under the Michigan gaming control and

 

revenue act, 1996 IL 1, MCL 432.201 to 432.226.

 

     (b) A federally recognized Michigan Indian tribe that operates

 

a casino in this state in which class III gaming other than

 

internet gaming is conducted under a facility license issued in

 

accordance with a tribal gaming ordinance approved by the chair of

 

the National Indian Gaming Commission. The division shall not issue

 

an internet gaming license unless the Indian tribe, in connection

 

with its application to conduct internet gaming under this act,

 

waives its sovereign immunity with respect to conducting internet

 

gaming under this act, including, but not limited to, obtaining

 

licensure and subjecting itself to enforcement by the division in

 

state and federal courts and paying fees and taxes imposed under

 

this act.

 

     (4) A qualified applicant 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 contain the information required by the division,

 

including, but not limited to, detailed information regarding the

 

ownership and management of the applicant, detailed personal

 

information regarding the applicant, financial information


regarding the applicant, and the gaming history and experience of

 

the applicant in the United States and other jurisdictions.

 

However, if the applicant holds a casino license under the Michigan

 

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

 

the applicant need not provide any information that it has

 

previously provided to the division unless notified by the division

 

that the information cannot be located.

 

     (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 strictly confidential and

 

shall use that material only to evaluate the applicant for an

 

internet gaming license for the 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.

 

     (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 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.

 

     (9) 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.

 

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

 

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

 

than internet gaming is conducted under a facility license issued

 

in accordance with a tribal gaming ordinance approved by the chair

 

of the National Indian Gaming Commission may conduct internet

 

gaming on the same basis as any internet gaming licensee licensed

 

by the division, only if either of the following applies:

 

     (a) The Indian tribe holds an internet gaming license under

 

this act.

 

     (b) The Indian tribe has entered into a compact with this

 

state under the Indian gaming regulatory act, Public Law 100-497,

 

or an amendment to such a compact, that has, to the extent required

 

by the compact, been approved by the legislature, and that meets

 

all of the following requirements:

 

     (i) The compact or amendment specifically authorizes the tribe

 

to conduct internet gaming to the same extent as an internet gaming

 

licensee licensed by the division under this act may, but subject

 

to all of the following:

 

     (A) The terms of the compact and any amendments to the compact


relating to internet gaming.

 

     (B) The Indian gaming regulatory act, Public Law 100-497.

 

     (C) The unlawful internet gambling enforcement act of 2006, 31

 

USC 5361 to 5367.

 

     (D) Any other applicable state and federal laws.

 

     (ii) The compact or amendment has been approved by the

 

applicable federal agencies as required by the Indian gaming

 

regulatory act, Public Law 100-497.

 

     (iii) The compact or amendment includes provisions addressing

 

all of the following:

 

     (A) The amount and manner of revenue sharing to be paid to

 

this state by the Indian tribe related to internet gaming.

 

     (B) A dispute resolution process, which must include a limited

 

waiver of sovereign immunity, to provide this state with legal and

 

equitable remedies enforceable in state and federal courts to

 

enforce the tribe's agreement to make revenue sharing payments to

 

this state related to internet gaming. If an Indian tribe fails to

 

comply with the requirements set forth in its compact or amendment

 

with respect to the revenue sharing payments to be made to this

 

state related to internet gaming, the tribe is no longer eligible

 

to be an internet gaming licensee and shall cease all internet

 

gaming operations.

 

     (C) The types of internet games to be offered. The compact or

 

amendment must provide that the Indian tribe may only offer games

 

that are authorized by the division.

 

     (D) Responsible gaming.

 

     (E) Technical and financial standards for internet wagering,


internet wagering accounts, and internet gaming platforms, systems

 

and software, and other electronic components for internet gaming.

 

     (F) One or more mechanisms designed to reasonably verify that

 

an individual who desires to place a wager over the internet gaming

 

platform used by the Indian tribe is 21 years of age or older.

 

     (iv) The compact or amendment includes all of the following:

 

     (A) A requirement that an individual who desires to place a

 

wager over the internet gaming platform used by the Indian tribe

 

must first satisfy the verification requirements required under

 

sub-subparagraph (B) to establish an internet gaming account or

 

make an internet wager.

 

     (B) A requirement that the internet gaming platform used by

 

the Indian tribe include verification mechanisms designed to detect

 

and prevent the unauthorized use of internet wagering accounts and

 

to detect and prevent fraud, money laundering, and collusion, and

 

that the internet gaming platform provider, if not tribally owned,

 

be licensed as an internet gaming vendor under this act.

 

     (C) A provision stating that if a court enters a judgment or

 

order that has the effect of invalidating or otherwise rendering

 

inoperative section 6(3)(a), which authorizes the division to issue

 

an internet gaming license to a casino licensee under the Michigan

 

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

 

the compact or amendment, to the extent that it authorizes internet

 

gaming by the Indian tribe, is inoperable and of no effect.

 

     (D) A provision providing that eligibility to conduct internet

 

gaming is conditioned on the tribe's continuous operation of its

 

casino under a facility license issued in accordance with a tribal


gaming ordinance approved by the chair of the National Indian

 

Gaming Commission.

 

     (2) This section does not limit the additional terms that this

 

state and an Indian tribe may negotiate and include in a compact or

 

amendment to a compact under the Indian gaming regulatory act,

 

Public Law 100-497.

 

     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 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 licensee

 

or applicant for an internet gaming license 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 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) An application under this section must be made on forms

 

provided by the division and contain any information required by

 

the division, including, but not limited to, detailed information

 

regarding the ownership and management of the applicant, detailed

 

personal information regarding the applicant, financial information

 

regarding the applicant, and the gaming history and experience of

 

the applicant. However, if the applicant is licensed as a supplier

 

under the Michigan gaming control and revenue act, 1996 IL 1, MCL

 

432.201 to 432.226, the applicant need not provide any information

 

that it has previously provided to the division unless notified by

 

the division that the information cannot be located.

 

     (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 licensure as an internet gaming

 

vendor strictly confidential and use the materials only to evaluate

 

an applicant 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.

 

     (8) 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.

 

     (9) The division shall deposit all application and license

 

fees paid under this act into the fund.

 

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

 

tribe under section 7(1)(b), 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 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


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 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 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. A person shall not conduct internet gaming under this act

 

until 150 days after the division promulgates the rules and the

 

rules take effect. 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.

 

     (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 for 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

 

include mechanisms on the internet gaming platform the 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.

 

     (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 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) 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.

 

     (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) 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 10% 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) If, as provided in a compact, amendment to a compact, or

 

other agreement negotiated with this state, a person is able to

 

lawfully conduct internet gaming in this state for a period of time

 

subject to payment of a revenue share or other payment to this

 

state that is lower than the tax rate imposed under subsection (1),

 

the tax rate under subsection (1) is automatically reduced to a

 

rate equivalent, as determined by the board, to the rate paid as a

 

revenue share or other payment under the compact, amendment to a

 

compact, or other agreement with this state during that period of

 

time. If this state enters into compacts, amendments to compacts,

 

or agreements described in this subsection with more than 1 person,

 

the tax rate under this section is reduced to the rate in the

 

compact, amendment to a compact, or agreement with the lowest rate.

 

For all calculations under this subsection, if there is more than 1

 

rate paid under a compact, amendment to a compact, or agreement,

 

the rate to be applied is the highest rate in the compact,

 

amendment to a compact, or agreement in effect during the

 

applicable time period.

 

     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) Money in the fund at the close of the fiscal year must

 

remain in the fund and not lapse to the general fund.

 

     (4) The board is the administrator of the fund for auditing

 

purposes.

 

     (5) The board shall expend money from the fund, on

 

appropriation, for all of the following:

 

     (a) Each year, $5,000,000.00 to the first responder presumed

 

coverage fund created in section 405 of the worker's disability

 

compensation act of 1969, 1969 PA 317, MCL 418.405.

 

     (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(3)(a), which authorizes the division to issue an internet

 

gaming license 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, 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 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

 

Senate Bill No. 204                                               

 

of the 99th Legislature is enacted into law.