Michigan Protects Regulated Gaming Industry Through Illegal Gambling Crackdown

Erik Gibbs

Illegal gambling machines at a Flint, MI store following a raid

The Michigan Gaming Control Board (MGCB) has reiterated its dedication to eradicating unregulated casino-style gambling devices from local businesses and dismantling unauthorized gambling rings. This action, emphasized in a new press release, underscores the state’s stringent stance on gambling, which is only permitted within the bounds of state law, such as within the confines of officially licensed casinos.

In the past year, the MGCB’s proactive measures have yielded significant results. A total of 64 businesses across Michigan were served with official notices to cease their unlawful gambling activities.

This led to the removal or deactivation of 167 gambling machines that were operating outside the legal framework. The board’s rigorous approach extends beyond just the machines; substantial progress has been made in the seizure and liquidation of assets tied to these illicit operations, striking at the financial heart of these illegal activities.

“Thanks to the vigilant supervision of the Michigan Gaming Control Board, last year, agency personnel were able to target and disrupt several instances of illegal gambling activities that undermined the integrity of our legitimate, regulated gaming industry.”

Henry Williams, MGCB Executive Director

Collaboration has been key to the MGCB’s success. Partnering with the Michigan Attorney General’s Office, the board has conducted thorough investigations, resulting in the confiscation of 79 additional machines used for illegal gambling in the year 2023 alone.

The legal repercussions for those involved in these unlawful activities have been severe. Nine individuals were convicted of criminal gambling offenses. Furthermore, 24 individuals were formally charged and arraigned on charges related to illegal gambling.

Retail, iGaming coalesce in Michigan

Michigan’s 26 casinos, both tribal and commercial, contribute significantly to its $11.74 billion annual gambling impact. This economic engine supports more than 60,000 jobs and generates over $2 billion in tax revenue for the state.

In February, the American Gaming Association reported that Michigan ranks among the most successful gambling markets in the U.S. According to the trade group’s Gaming Revenue Tracker for 2023, Detroit makes the top 10 list for cities. This is despite a workers’ strike that hampered casino activity last October and November.

Online gaming isn’t hurting the land-based segment, either. The state’s land-based casinos have experienced a significant boost in revenue since the introduction of online casinos. According to a comprehensive report by Eilers & Krejcik Gaming (EKG), online operators have positively influenced brick-and-mortar casinos.

The state witnessed a 4.89% increase in gross gaming revenue for land-based casinos after the launch of Michigan’s online casinos. This dynamic shift highlights the symbiotic relationship between online and land-based gambling.

Adjusted gross revenue (AGR) has seen even better results, according to the EKG report. The AGR for the three casinos in Detroit has increased by an average of 21.6% across an eight-quarter comparison of results prior to and after the launch of online gambling. However, part of the pre-iGaming era — specifically 2020 — included a closure of land-based gambling due to COVID-19.

Online casinos became legal in Michigan in 2021, and the state currently boasts 15 licensed operators. These operators include well-known brands such as DraftKings, BetMGM, FanDuel, BetRivers, Caesars Palace, and PokerStars. In 2023, these operators collectively generated revenue of $1.9 billion.