BillCam

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 billto 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.

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.

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.

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.

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.

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.

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.

(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.

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.

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.