Michigan Gaming Legislation Includes New Surety Bond Requirements

Surety Bonds a Part of Michigan Gaming Legislation

Ding, ding, ding! The slot machine indicates someone has hit the jackpot. Clank, clank, clank! The familiar sound of the coins exiting the machines fills the casino. Shuffle, shuffle, shuffle! The dealers rearrange the cards to signal a new round. The noises grab the attention of all patrons and contribute to the excitement of the atmosphere.

While these sounds are indicative of a traditional gaming environment, there are also non-traditional ways of simulating gaming ambiance. The internet offers individuals another way to place bets, play games, and feel as if they are in a casino.

The state of Michigan recently enacted gambling legislation with conventional and unconventional gaming environments in mind. The new bills, enacted on December 20, 2019, include the Charitable Gaming Act, the Gaming Control Act, the Internet Gaming Act, and the Sports Betting Act.

Charitable Gaming Act

Michigan House Bill 4173 is an updated version of bill 4172. The bill introduces the addition of millionaire parties. Furthermore, House bill 4173 defines millionaire parties as “an event at which wagers are made on games of chance that are usually placed with a gambling casino that have a nominal value equal to or greater than the value of the currency for which they can be exchanged.” Essentially, millionaire parties refer to bets placed with imitation money or chips.

What is the bond requirement for suppliers?

The commissioner requires individuals licensed to sell charity game tickets and/or numeral game tickets to purchase a performance bond of not less than $50,000 and not greater than $1,000,000.

Why are suppliers bonded?

A performance bond ensures individuals selling game tickets operate according to the terms stipulated by the state of Michigan. For example, some of the regulations include keeping a record of each event, filing a financial statement, and allowing an authorized representative of the bureau or state to inspect the gaming location during business hours.

Failure to comply with Michigan’s regulations may result in license suspension, fines, or a 2-year automatic status of ineligibility to reapply for a license.

Gaming Control Act

House bill 4307 appoints the Michigan Gaming Control Board as the authority for managing the licensing and regulation requirements for casino operations. As a result, applicants will no longer have to post a bond to showcase their financial ability. However, the applicant will still have to purchase general liability and casualty insurance.

What is the insurance requirement for casino operators?

According to the bill, “the Gaming Control Board will take into consideration the applicant’s moral character, financial ability, and responsibility when determining whether or not to grant a license.” Therefore, an applicant’s financial status is determined based on their ability to maintain satisfactory liability and casualty insurance.

Internet Gaming Act

In House bill 4311, the Michigan Gaming Control Board must impose licensing requirements for individuals operating lawful internet gaming services. Specifically, the Board has the ability to impose fees, taxes, payment obligations, and bond requirements.

What is the bond requirement for internet gaming operators?

Internet gaming operators must prove their ability to purchase an adequate surety bond before becoming licensed. The bond proves the applicant is financially stable and offers financial protection for harmed parties as a result of the operator’s failure to adhere to the terms of the bond.

Sports Betting Act

House bill 4916 requires persons engaging in internet sports betting to comply with the state of Michigan’s obligations. For instance, the regulations include creating an internet sports betting fund and prohibiting certain acts by providing penalties.

Internet sports betting operators may obtain a license if, along with meeting other standards, they are able to purchase an adequate surety bond. Consequently, by purchasing a surety bond, an applicant can demonstrate they are financially suitable to receive a license.

How do I get a gaming operator surety bond in Michigan?

You can request a Michigan Gaming Operator Bond online 24/7 or call 1(800)308-4358 to speak with a surety expert about your bonding needs. 

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About the Author

Carly Levine
Carly is a senior at the University of Missouri studying Communications with an emphasis in Mass Media. She is a member of the marketing department and outreach team for SuretyBonds.com, a leading provider of online bonding for clients nationwide. She loves creative writing, reading, and most importantly, sushi.