Sports Betting and Online Gambling Bills Approved by Michigan House, But Face Opposition From Governor
Published November 7, 2019 by Elana K
Michigan’s House of Representatives has approved a 10-bill package that will legalize both online gambling and sports betting in the Wolverine state. However, the state’s governor, Gretchen Whitmer, has raised several concerns.
Michigan’s House of Representatives has approved a multi-bill package that will legalize both online gambling and sports betting in the Wolverine state. The package passed in a vote 63-45 with bipartisan support. However, the state’s governor, Gretchen Whitmer, has raised several concerns about legalizing the two industries, mainly, that gambling expansion will cannibalize revenue from the state lottery, much of which goes toward school funding.
Negotiations
Representative Brant Iden, the sponsor of the bills, has tried to appease the governor by raising the tax rates for casino operators. If the tax rates are higher, there shouldn’t be a problem generating enough revenue to support state schools. However, Iden is walking a narrow tightrope, since he’s trying to appease the governor but also get all the state’s casinos onboard, including tribal casinos.
As of now, the tax rate is set at 8.75% for sports betting, minus winnings paid out. As the capital city, Detroit will be allowed to collect an additional 3.25% tax. For online gambling, taxes will range between 4% and 19% in the first three years, depending on how much revenue the operators generate. In the fourth and fifth years, the tax rate is scheduled to rise to higher ranges, also depending on how much revenue operators generate.
Concerns
Iden is caught between a suspicious governor and casinos that don’t want the tax rates to shoot through the ceiling. Iden claims that he’s done everything possible to allay the governor’s concerns, and hope that she’ll be responsive if the bill passes through the Senate.
“The tax rate went north.” he said. “We got her more than half of what she asked for on both [internet gambling and sports betting]. The money was directed to the school aid fund. My directive, from what I had always heard, was ‘protect the school aid fund.’ I believe that these bills did that. So it’s very confusing to me when the governor says they’re not in support.”
Should the bills pass, Iden estimates that they can generate up to $30 million a year in tax revenue.
