The Michigan Gaming Control Board (MGCB) is answering calls for the agency to minimize efforts to combat the use of what it considers to be illegal casino-style gaming machines in the state.
The MGCB is responding to gray machines manufacturer Pace-O-Matic’s presence at brick-and-mortar properties across the Wolverine State. Pace-O-Matic, which also licenses skill games, believes the casino-style games are lawful sources of entertainment and are exempt from gambling prohibitions because they include an element of skill.
However, the MGCB takes a different stance, insisting the machines are illegal gambling tools.
“The MGCB is committed to upholding the integrity of the state’s gambling regulations and ensuring a fair and responsible gaming environment for all citizens,” said MGCB Executive Director Henry Williams. “It is essential to clarify that these casino-style electronic gaming machines are not exempt from Michigan’s penal code, and individuals operating or utilizing them are subject to enforcement actions by the state.”
The MGCB has determined that the gray machines fail to adhere to state gaming regulations as they operate in a manner resembling slot machines that determine winnings based on circumstances outside of a player’s control. Retail locations in Michigan hosting the games are attempting to circumvent regulations by offering gift cards as rewards under a state redemption game exception but the move is being considered unlawful.
“The public is being misled when told that skill and gift cards equate to the legality of a machine. What is being ignored is that the machines in question have been played and/or examined by investigators and determined to be casino-style slot machines for which winning depends on chance,” continued Williams.
The MGCB says it has taken its stance on casino-style game machines to protect players. The regulator sees the games as having the potential to mislead or take advantage of players due to the machines not adhering to required consumer safeguards that prevent unfair practices.
The machines also result in a loss of potential state revenue. As a result, public schools and local governments in Michigan are deprived of funding.
Consequences in Michigan
Since 2019, the MGCB and the Michigan Attorney General’s Office have seized 436 illegal gaming machines along with $176,001 in cash and $15,415 in gift cards. The seizures have resulted in 29 people being convicted of various felonies and misdemeanors.
The MGCB is taking steps to curtail the use and appearance of gray machines.
The regulator has been working with businesses to educate them on state gaming laws. The MGCB has also publicly provided educational resources on its website and provided a direct line of communication for businesses to contact the agency with questions.
Michigan gaming receives investment
The MGCB is deploying resources to combat illegal gambling in Michigan after being promised a fresh injection of capital as part of the state’s budget for fiscal year 2025.
Last month, the Michigan Legislature reached an agreement to allocate $1.9 million toward the MGCB from the budget to add 14 full-time staff positions. The budget also distributes capital to the Compulsive Gambling Prevention Fund, which is receiving a $3 million boost.
