Michigan lawmakers moved one big step closer to legalizing sports betting Tuesday morning, when the Senate Regulatory Reform Committee unanimously moved a package of gaming bills to the full Senate, including HB 4916 pertaining to sports wagering.
The bill would allow for mobile sports betting through platforms tethered to commercial properties holding casino licenses under the Michigan Gaming Control Act. The bill would also permit online sports wagering through tribal entities, accomplishing this through the addition of sports betting as Class III gaming under applicable compacts.
According to Senator Curtis Hertel’s office, it’s likely the package will get voted on Wednesday and then sent to Governor Gretchen Whitmer for approval.
The bills are part of a bigger iGaming package, which also easily passed committee.
After months — years, really — of negotiations with local tribes, professional sports leagues and, most recently, the governor’s office, it appears that sports betting should be legal by the end of the year, as lawmakers say they’ve come to an agreement with Whitmer’s office on tax rates.
iGaming tax goes up, sports betting tax goes down
Whitmer had been concerned that iGaming would take revenue away from the state lottery and, by extension, the school-aid fund, and was asking for a higher tax rate on iGaming and sports betting. In the end, the rate for iGaming rose dramatically, while the rate for sports betting dropped from a proposed 8.75 percent to 8.4 percent.
Whitmer had been pushing for a 15 percent tax rate on sports betting, but bill sponsor Representative Brandt Iden was opposed to such high rate, noting throughout that potential operators would balk at that number.
The iGaming/online casino tax rates are drastically increased from a previous bill iteration that had placed them between 4 and 23 percent. The rates are now tiered, as follows from HB 4311:
On Tuesday, there was little discussion as the Regulatory Reform Committee methodically replaced each House bill with a Senate substitute and then moved each new bill to the Senate floor. The bills remain largely the same as when they passed out of the House, and include a data mandate benefiting pro sports leagues, as well as legalizing tribal sports betting, though Whitmer will have to sign off on adding sports betting to a group of tribal-state pacts.
With regard to the tax rate, the 8.4 percent should be considered acceptable to potential operators, though those in the city of Detroit are subject to an additional 3.25 percent tax, bringing the total tax on Detroit-based sportsbooks to 11.65 percent. Unchanged are the application and renewal fees for sports betting, which remain at $100,000 for the application and $50,000 per year for renewals.
The bill will permit each sports wagering licensee to offer one online sportsbook/brand only, same as in Pennsylvania, but breaking from Indiana and New Jersey which allow up to three “skins” apiece in a more robust marketplace. But for iGaming, the bill says that licensees may offer up to two skins, one for each of interactive poker and for casino style games.
While the Michigan bills do not specifically legalize sports betting at retail locations, Iden has gone on the record as saying that he believes that physical sportsbooks could open in Michigan with little legislative action (tax issues must be sorted out). His goal has always been to legalize mobile sports betting and iGaming.
Among the other bills that were moved to the Senate floor is a bill that would of legalize daily fantasy sports, which also call for an 8.4 percent tax rate.
This story will be updated.
