Michigan Auditor General Criticizes State Gaming Control Board

by Kyle Miller

The office of the Auditor General has criticized the State Gaming Control Board for failure to ensure staff members of casinos in Detroit are licensed based on regulations.

In every state that offers casino gambling, there is a commission or gaming control board that acts as the regulatory body, governing the casinos as they offer services. Casino operators have to abide by rules and regulations or they will face strict consequences and punishments for their actions. However, who monitors the governing bodies? In Michigan, the Gaming Control Board recently came under fire by the Office Of The Auditor General, who says the board has not done their due diligence and made sure that staff members of a casino in Detroit are licensed as they should be.

A Report by the Auditor General

A report was released by the Auditor General that covered a 19 month time frame. The report started covering the casino in October of 2013. The goal of the report was to assess the sufficiency of the regulatory as well as enforcement activities for chartable gaming as well as the three gaming venues that operate commercially in Detroit.

In Detroit, there are three casinos that offer gaming services. The report was conducted by an independent oversight arm of the government which found that two casinos in the city had employed over 200 individuals who were not licensed to what is considered standard compliance within the gaming rules of the state. The number of employees is equal to 9% of the workforce spread between the two casinos. Recommendations were provided to the gaming venues in which the Michigan Gaming Control Board should update their internal controls and make sure that compliance monitoring is complete.

Gaming Control Board’s Response

Michigan Gaming Control BoardAfter the information of the report was revealed, the Michigan Gaming Control Board admitted that 14% of their quarterly inspections were not completed. The board also agreed that their monitoring procedure for compliance is in need of improving. However, the Gaming Control Board also rejected the other findings of the audit.

The board dismissed that opinion that licensing staff on level one standard would ensure more integrity at the gaming venues as well as provide more public confidence in the gambling regulator. The Gaming Board stated that they feel there is minimal risk in ensuring that individuals that are qualified, suitable and eligible are selected to work in positions of authority at casinos by utilizing the processes for licensing that are already in place.

The regulator of the state reportedly issues licensing to employees based on three tiers. The licensing can include extensive criminal background checks, delinquent tax searches, personal financial reviews and more. Supervisors must be at level one authorization and are required to meet certain standards to gain this level of certification. The Gaming Control Board reportedly took the meaning of level one licensing to mean individuals who supervise an entire department or those who make ‘long-term discretionary decisions’.

The Auditor General felt that the 213 individuals of the report need to be provided level one licensing after meeting the set criteria.

The report covered the commercial casinos in Detroit but not any Indian tribal gaming venues of the state. In Detroit, the commercial gaming venues include the Motor City Casino, Greektown and the MGM Grand. The MGM Grand is the most successful following by MotorCity and Greektown. Michigan does not have the largest gambling market in the United States, representing only 3.4% of the toatal gambling revenues for the United States in 2015, with similar numbers likely for 2016 as well.