Michigan Governor Vetoes Package of iGaming Bills That Had Opened Door To Legal Sports Betting
By Jill R. Dorson | Published: December 28, 2018 at 7:21 pmWith 48 hours remaining in his term, outgoing Republican Michigan Governor Rick Snyder on Friday vetoed the package of iGaming bills that passed the state legislature earlier this week, Representative Brandt Iden (R-District 61) told Sports Handle.
“The governor just vetoed bills,” Iden said in a phone call. “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 (on the same page).”
Iden is committed to continuing to carry the torch for sports betting, saying that he will introduce new legislation toward the end of January. Michigan’s legislative session opens on Jan. 9.
Incoming MI Governor Supports Sports Betting
The process won’t be easy. Iden garnered bipartisan support over the last year, bringing operators, politicians and tribal interests together to back a package of iGaming bills that included language that set the table for legalizing sports betting in Michigan, one of the most populous states in the nation.
While he won’t be starting from scratch, re-introducing the bills to a new legislature will require another round of committee meetings and House and Senate votes before putting a bill on incoming Democratic Governor Gretchen Whitmer’s desk.
Whitmer is on the record as supporting sports betting during her campaign to replace Snyder, who was term-limited. Heading into the November elections, Republicans were the majority in both Michigan chambers. Despite a strong showing by Democrats, Republicans will remain the majority when the new state legislature is sworn in.
“We do have a different makeup, but we had tremendous bipartisan support from both House and Senate,” Iden said. ” Frankly we have a governor, who even though she doesn’t wear the same jersey that I do, will she be interested in passing a bill that Governor Snyder vetoed? Maybe?”
In a press release from the Snyder’s office, he said he vetoed the bills because of “unknown revenue implications” and because he believes that state should further study internet and mobile betting before legalizing. Snyder also wrote that he was concerned that with the introduction of iGaming, the state would see a reduction in tax revenue as players shift from the lottery’s online gaming to other apps. He specifically pointed to the “lower tax rate” in HB 4926 as cause for concern. Iden’s iGaming bills were among 40 that Snyder vetoed Friday.
Iden had spent years wrangling different interests into backing his iGaming legislation, and on Dec. 20, at the tail end of the lame-duck session, HB 4926 passed the Senate 33-5 and the House, 71-35. The bill included a key line related to sports betting:
The division may permit internet gaming operators licensed by the division to accept internet wagers under this act on any amateur or professional sporting event or contest.
Bills Would Have ‘Opened The Door’ For Sports Betting
While the language, according to Iden didn’t technically legalize sports betting, it did make it legal for the what would have been the newly created Michigan Gaming Control Board to “authorize tribal and commercial interests to apply for an online gaming license.”
Iden said he believed that additional statutory framework would have been needed to legalize sports betting, but that the intent was to “open the door.”
A second bill that also passed the House at the 11th hour (but not the Senate) called for a tax rate of 8 percent of adjusted gross revenue on sports betting and internet gaming. In addition, that bill explicitly stated “no other tax or fee may be imposed by agreement or otherwise on a casino licensee by this state or a political subdivision of this state for sports betting or internet gaming.”
That passage appears to be directed a preventing a fee — “integrity,” royalty or otherwise — being imposed to pay the professional leagues, who have been lobbying for such an off-the-top of all wagers payout from states across the nation. The 8 percent tax rate, Iden said, was a number agreed upon by all stakeholders, as one that would allow operators to profit and the state to see meaningful revenue.
For reference, Nevada’s rate of 6.75 percent is the lowest in the nation and Rhode Island’s 51 percent is the highest. Operators have consistently argued that a tax rate of 10 percent or less is needed for them to be competitive and profit.
Key to Iden’s years-long negotiations was getting Michigan’s many tribal interests on board. After the veto, he said, ” We took out poison pill language, and added in gaming license that everyone could apply for. With such a strong tribal presence, happy that we got that far.”
