Michigan Poised to Legalize Sports Betting and Online Gambling
In a series of decisive votes held on the final day of this year’s session, the Michigan Legislature passed a package of bills this week to legalize and regulate the sports betting and online gambling industries.
House Bill 4916 – which would allow Michigan’s three commercial and 23 tribal casinos to operate both brick and mortar and online / mobile sportsbooks – was approved by a 35-3 vote in the state Senate on Wednesday.
On the same day, the Senate reconvened to vote on House Bill 4311 – which allows the same casinos to partner with online / mobile casino, poker, and daily fantasy sports (DFS) providers – and approved the legislation by an identical margin.
The state House of Representatives had previously approved the bills back in October, and that chamber followed up by approving the Senate’s amendments in overwhelming roll call votes.
Sponsor Finds Redemption After Last Year’s Shock Veto
In a public statement, state representative Brandt Iden (R-61) – who sponsored both bills and spearheaded the lengthy debate process that guided them to passage – celebrated the culmination of a years’ long effort:
“It’s been a long journey to move sports betting and casino-style gaming into a regulated, safe and modern environment – but the end is in sight, and with it a great opportunity for Michigan will begin.”
That sends the sprawling gambling expansion package to the desk of Governor Gretchen Whitmer, who isn’t expected to wield her executive veto powers in a repeat of last year’s iGaming fiasco in Michigan.
After a bipartisan legislative push to legalize iGaming in 2018, outgoing Governor Rick Snyder shot the bill down with a surprise veto. In explaining his decision, Snyder cited vague concerns over the idea that expanded legal gambling could “cannibalize” revenue currently enjoyed by the state’s lottery – which contributes significant sums to Michigan’s School Aid Fund.
Whitmer has previously cited similar concerns regarding cannibalization, but she sought higher tax rates on online slot and casino revenue given those games compete directly with several “iLotto” products.
Governor Expected to Sign Off After Offering Direct Input
Rather than ignore the issue as her predecessor did, Whitmer elected to drive the gambling expansion debate by advising lawmakers as to her standards for signing the bills into law.
Deploying fellow Democrats state senator Curtis Hertel Jr. (D-23) and state representative Rebekah Warren (D-55) as allies, Whitmer pushed for a higher tax rate on iGaming revenue than the bill’s original construction.
Iden responded by proposing a tiered tax system using higher rates than he originally sought, and the recently approved bill now calls for operators to pay a minimum of 20 percent on gross gaming revenue of less than $4 million, and a maximum of 28 percent on revenue over $12 million.
According to Whitmer’s spokesperson Tiffany Brown, those negotiations and their results are amenable to the Governor, so a veto won’t be in the cards this time around:
“The governor is pleased with the progress made on gaming over the course of this year, particularly once Sen. Hertel and Rep. [Rebekah] Warren were able to engage and resolve key issues to get this package across the finish line.
This is a good, bipartisan solution made possible by working together on a complex issue, and the governor looks forward to closely reviewing this package once it hits her desk.
The governor’s top priority when getting this done was to protect the School Aid Fund, and Sen. Hertel and Rep. Warren helped make that happen and addressed a number of other concerns she had.”