Michigan would legalize online gambling under a bill passed by the state House.

Lawmakers voted 68-40 Tuesday night for two main bills to create a Lawful Internet Gaming Act that would regulate online versions of licensed casino games.

The legislation, which was introduced last year by state Rep. Brandt Iden, R-Portage, would establish a Division of Internet Gaming within the existing Michigan Gaming Control Board. The new division would issue internet gaming licenses, allowing casinos to receive wagers online – including sports bets, if the board legalizes sports betting statewide in the wake of a recent Supreme Court ruling.

All online wagers would be made through currently-existing land-based casinos licensed by the new division, including any tribal casino that works with the state to reflect the new technology. Websites that accept wagers would have to include measures to ensure that participants are at least 21 years old.

“People in Michigan are already gambling over the internet, but they are doing so at risky and illegal websites,” Rep. Iden said. “The Michigan websites will have strict state oversight, unlike the illegal and unregulated sites our resident use now, at great risk to their finances and personal information.”

Casinos would have to pay an application fee of $100,000 for an internet gaming license. If approved, they would pay $200,000 for the initial license, and an additional $100,000 each year after that.

License holders would also be subject to an 8 percent tax on gross gaming revenues.

Five percent of the tax revenue would be allocated for schools, five percent for the state transportation fund, and another fifty-five percent for the city in which the casino is located, to be used for hiring street patrol officers, downtown economic development programs, public safety and anti-gang programs, road repairs, and other programs “that are designed to contribute to the improvement of the quality of life in that city.”

The remaining thirty-five percent of the tax revenue would go to a new Internet Gaming Fund for regulating and enforcing the new legislation. The fund would also apportion a million dollars to help people struggling with gambling addiction.

If the bills pass the Senate and then the governor's desk, Michigan would join a wave of states currently exploring the online gambling industry as a source of revenue.

Delaware, Nevada, New Jersey, and Pennsylvania already allow some form of online gambling, while Illinois, Louisiana, Massachusetts, New Hampshire, New York, and West Virginia have considered online gambling bills this year.

Critics say the proposal would enable gambling addicts, especially young adults.

The Senate is not expected to consider the legislation until after it returns from a summer break.