Super Bowl squares and March Madness pools are technically illegal to run by any private individual in Michigan and in most states, but a recent bill being considered would allow social betting if it meets several criteria.
Just Between Friends
Social betting is done every day, whether it is a wager between friends on the golf course or a bet on a game at someone’s house. Technically, it is illegal, as is organized gambling, but although both run afoul of the law, the latter can attract misdemeanor fines in Michigan.
However, a state legislator wants to loosen the leash on social betting.
Senator Veronica Klinefelt introduced Senate Bill 511, which would amend the state’s penal code to allow social wagering contests, like betting pools and sports squares. But several criteria must be followed; otherwise, the operator could be subject to a $5000 fine.
The bill was recently heard by the Senate Regulatory Affairs committee, but no vote was taken after opposition to the bill by three Michigan gaming tribes—Saginaw Chippewa Indian Tribe, Gun Lake Tribe, and Nottawaseppi Huron Band of Potawatomi.
Native American gaming tribes guard their gaming territory vigilantly, as well as any other entity, including small-stakes sports squares and March Madness betting tournaments.
“With SB 511, its sole purpose is to legalize what we do every day, what everybody does all the time: bet their best friend $5 on a football game,” said Klinefelt during a Committee on Regulatory Affairs hearing. “People do March Madness and Super Bowl squares with their friends; nobody is making any money, nobody is making any profit off of it.”
Relationships Matter
SB 511 has several stipulations that must be met in order to meet the letter and spirit of the law.
The tournaments cannot benefit anyone, which means the operator of the tournament cannot take a percentage for themselves for running the pool. Neither can business establishments like bars and restaurants run them to drive business.
Moreover, there must be a relationship between the contestants outside of the gambling aspect, which means strangers who read about the contest cannot enter. This must be among a group of people who know each other via a club or some other activity.
As the bill is currently written, the following rules apply, but there is a distinct possibility that some of these issues could be amended to allow the bill to pass.
- The contest is “incidental to a bona fide social relationship.” In other words, the contest must be run between genuine friends, coworkers, or acquaintances.
- Contest is capped at 100 participants.
- The organizer of the contest must be one of the participants.
- The organizer cannot benefit from running the contest other than winning prize money.
- Entry fees are capped at $25.
- The entire prize pool goes to one or more winners.
- No other money besides the entry fee or thing of value can be used to participate in the contest.
- The event that is being wagered on does not occur within a “gambling establishment, restaurant, entertainment, or bar.” The event cannot be a promotional opportunity to drive business.
Senate Bill 511 states: “The bill would amend Chapter XLIV (Gambling) of the Michigan Penal Code to exempt a wager that is incidental to a bona fide social relationship and that meets other conditions from the current prohibition on gambling on the result of a race, contest, or game. It also would increase the fine for violating the prohibitions.”
Stay tuned for the latest updates on this and other major industry developments, including the top-rated sportsbooks.
