History of Horse Racing, the Lottery & Charitable Gambling in Michigan

The Racing Act of 1933 established regulations which legalized pari-mutuel horse racing in Michigan. This Act was amended under the Horse Racing Law of 1995. The Michigan Gaming Control Board currently oversees these laws and they license and regulate the horse racing activities.

On May 17, 1972 voters in Michigan voted in favor of a State lottery. The lottery was officially established on August 1, 1972. In addition to the lottery, charitable gambling was also legalized during the same year.

History of Casino Gambling in Michigan

During 1983 the Keweenaw Bay Indian Community (KBIC), located in Baraga, Michigan issued a license to operate a for profit gambling casino to one of its tribal members named Fred Dakota. Dakota was a Tribal Chairman from 1971 through 1982, with the exception of one year. He was also the Executive Director for the Tribe from 1974 through 1982. The casino operated out of his garage which is located on the L’Anse Indian reservation. His casino was privately owned and operated. Later his casino moved to another area of the reservation where he offered craps, poker and pull tabs. Fred’s casino eventually closed. He faced too many legal issues to keep it open for business.

Fred’s casino was operating for only a short time. However, it did pave the way for the tribe to establish their own Tribally operated casino in 1984. This was just the beginning of the expansion of gambling in Indian country. There were legal battles brewing across Michigan and the country as tribes battled states over their right to establish casinos.

Casinos Help Fund Local Projects in Michigan

Tribal Casinos: Funds for Michigan

Michigan’s tribal casinos generate a great deal of money from its patrons. A portion of each Tribe’s gambling revenue is remitted to their local surrounding communities. Each tribe contributes 2% of their net wins to the local revenue sharing board or Michigan State Government. Some tribes, depending on their exclusivity arrangements, pay into other funds. The additional payments provided by some tribes ranges from 2%-12%. This money is placed in the Michigan Economic Development Corporation (MEDC) and the Michigan Strategic Fund (MSF). These oversight divisions handle the transfers and expenditures of the gambling revenue to the local communities.

The 2% remittance by all tribes is used within each community to provide needed services and programs. Just to give our readers an idea of how much money has been contributed to the casino funds, the following top four 2020 contributors are listed below.

• Saginaw Chippewa Indian Tribe- $5,293,564
• Nottawaseppi Huron Band of the Potawatomi- $4,918,734
• Pokagon Band of Potawatomi Indians- $4,396,495
• Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians- $3,684,810
  
  

Here are just some of the worthy causes that make valuable use of the net wins from tribal casinos in Michigan.

• Public Schools
• County Sheriff’s Department
• Fire Department
• Township Needs
• Parks and Recreation
• State Fair Funding
• YMCA
• Watershed Programs
• Library
• Health Department
• And More

Michigan gambling is bringing in extra funds. This is especially valuable during the COVID pandemic period. The tribal and commercial casinos were all shut down for various periods of time. Today, many tables inside casinos remain closed due to distancing and health safety requirements. The recently passed (January 2021) online gambling and sports betting in Michigan has allowed for additional funding to communities during the time the brick and mortar casinos were closed. The online gambling and sports betting options has benefited local communities during these difficult financial times.

Commercial Casinos in Detroit: Funds for Michigan

In 1996, the State of Michigan and its people passed Proposition E. This allowed for the State to open up commercial casinos in the Detroit area. This was in competition with the Indian casinos so the tribal governments no longer had to make payments into the strategic fund. As indicated above, most tribes now only pay into the local government units. The 3 commercial casinos in Detroit are MGM Grand, Motor City and Greeektown Casino. The commercial casinos pay wagering taxes into the State at 8.1% and the City at 10.9%. In some cases, the city of Detroit asks for other wagering tax payments.

Like the Tribal Casinos, community projects to assist the public are provided. The entire amount of the State Wagering Tax goes to K-12 classroom.

Here are some examples of the the allocation of funds for community work:

• Neighborhood Economic Development
• Youth Development
• Anti Gang Education
• Programs for the Fire Department
• Hiring and Training of New Patrol Officers

The pandemic in 2019-21 has had detrimental affects for the State of Michigan and Detroit. With the legalization of online gambling and sports betting, more funds will continue to come into the State of Michigan. This new legislation will have a major positive impact of the economics of the city and state.

State of Michigan & Compacts Signed with Federally Recognized Tribes for Gambling

In 1988 the United States Congress enacted the Indian Gaming Regulatory Act (IGRA). This Act provided regulatory oversite of gaming operations that occurred on Native American Indian Reservations. The Act was administered by the National Indian Gaming Commission (NIGC). The NIGC provided guidance to Tribal nations to create or expand their Tribally owned casinos. The State of Michigan set up compacts with the tribes in response to the IGRA. This allowed them to offer Class III games which include electronic games of chance and full gaming opportunities.

In 1993 the State of Michigan approved compacts with the following tribes:

• Bay Mills Indian Community
• Grand Traverse Band of Ottawa and Chippewa Indians
• Hannahville Indian Community
• Keweenaw Bay Indian Community
• Lac Vieux Desert Band of Lake Superior Chippewa Indians
• Saginaw Chippewa Indian Tribe
• Sault Ste. Marie Tribe of Chippewa Indians

In 1998 the State of Michigan approved compacts with the following tribes:

• Little River Band of Ottawa Indians
• Little Traverse Bay Bands of Odawa Indians
• Nottawaseppi Huron Band of Potawatomi Indians
• Pokagon Band of Potawatomi Indians

In 2007 the State of Michigan approved a compact with the following tribe:

• Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (Gun Lake Tribe).

Non Federally Recognized Tribes

The tribes listed below are working to become federally recognized. When/if this happens, the tribes will be able to negotiate a compact with the state of Michigan. This will allow them to offer casino gambling.

• Burt Lake Band of Ottawa and Chippewa Indians
• Grand River Band of Ottawa Indians

Land Based and Online Casino Partners

The Michigan Lawful Internet Gaming Act of 2021 allowed for each tribal and commercially owned casino to create an online partnership. Michigan has over two dozen tribal casinos and three commercial casinos which have platform provider partners that jointly offer online sports betting, online gambling casinos and in some cases poker. 

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