Last year, Michigan lawmakers passed a trio of bills that would have legalized online gambling in the state, but Governor Rick Snyder vetoed them on his way out the door. Early on in the new legislative year, another bill has been introduced and is already starting to roll.
2018 Bill Couldn’t Get Past the Governor
Rep. Brandt Iden was the champion of last year’s measure and was confident that it would get done. When the Governor gave it the thumbs down, he told SportsHandle, “The governor just vetoed bills. I am surprised and disappointed. With this many stakeholders on board, it took us two years to get to this point, and it’s the first time in any state history that we had all the parties that were supportive of the bill (in agreement).”
And he was right on the bills’ support. The main bill passed the House by a vote of 71-35 and the Senate by a vote of 33-5. The three Detroit casinos, MGM Grand Detroit, MotorCity, and Greektown had come to an agreement with the state’s tribes and were therefore supportive, as well.
In his veto letter, Governor Snyder said of his decision:
A significant amount of work went into these bills and getting them to a place where several stakeholders either expressed support or neutrality, and I appreciate that many pro-gaming stakeholders coalesced around these bills. However, due to largely unknown budgetary concerns, I believe this legislation merits more careful study and comparison with how other states have, or will, authorize online gaming. To be blunt, we simply don’t have the data to support this change at this time.
Principally, gambling behavior could shift from the State’s ILottery program to internet-based gambling at casinos. In Fiscal Year 2017, the lottery distributed $924.1 million to the School Aid Fund. For each $10 of spending on the lottery, the School Aid Fund receives approximately $2.76. Under HB 4926, because of its lower tax rate, each $10 in online betting translates into just four cents deposited into the School Aid Fund. Such a significant reduction, without a clearer understanding of internet gambling revenue growth potential, is concerning. Moreover, I am also concerned that revenues may be lost as gambling behavior shifts from on-premises, to online.
Finally, I am concerned that the bills will encourage gambling by making it much easier to do so. I do not think it is appropriate to sign legislation that will effectively result in more gambling, with a reasonable chance that the state could lose revenue that could be helpful in dealing with social service issues that are ordinarily attendant to increased gambling behavior.
Prospects Rosy in 2019
Now, in 2019, Iden has once again introduced a bill, HB 4311, in the Michigan House. It has already built momentum, making it through two very positive hearings in the House Regulatory Reform Committee. At the end of the second one this week, the committee voted 13-1 in favor, with Rep. Frank Liberati being the only one to vote against it (he was one of three who voted against it last year). The bill now moves on to the House Ways and Means Committee, of which Iden is the chair.
Iden was again confident about the bill’s chances going into this year, though one slight worry he had was that even though both the House and Senate passed it easily last year, there was naturally a lot of turnover in membership because of the 2018 elections. It appears, though, that his new colleagues have already been getting up to speed on the subject and he should have a great deal of support. New Governor Gretchen Whitmer supports sports betting, so chances are she will support online gambling, too.