The Michigan House of Representatives on Tuesday passed a series of three bills relating to internet gaming, setting the table for Michigan sports betting to become legalized. The bills, HB 4926, 4927 and 4928 essentially allow for internet and mobile gaming in Michigan, but the key bill, HB 4926, according to sponsor Representative Brandt Iden (R-District 61), also has language that would allow the state’s gaming commission to draw up regulations for internet and mobile sports betting.
“We all know that sports betting is coming and this sets the framework (for the gaming commission), but realistically, I don’t think they’ll do that that until we have laws for the brick-and-mortar casinos in place,” Iden told Sports Handle.
Iden said additional legislation will be needed to allow sports betting at brick-and-mortar outlets. The bills passed the Michigan House easily, 68-40. The Senate is not expected to take up the issue until after the summer recess. The bills that passed call for an 8 percent tax on internet gaming.
New Michigan Internet Gaming Bills Also Include Language to Allow Gaming Commission to Begin Laying Out Framework for Online Michigan Sports Betting.
Iden, the chairman of the House Regulatory Reform Committee, which handled the bills before the full floor vote, has been a key driver in the effort to make sports betting legal in Michigan.
With the table set, Iden and his colleagues plan to use the summer recess to refine sports betting legislation that can be passed by both chambers when the state legislature reconvenes in the fall. Between now and then, Iden will work with tribal leaders throughout the state as well as hear what the professional leagues have to say regarding an “integrity fee” or the alternative “betting right and integrity fee.”
[Also See: A Timeline of the Leagues’ Fight For A Sports Betting ‘Integrity Fee’]
The leagues have been lobbying across the nation for a cut of the action in states where sports betting is or will become legal. But so far, no state has agreed to cut the leagues in. New Jersey, Pennsylvania and West Virginia have new sports betting laws on the books that do not have integrity fees. New Jersey operators will take their first sports bet Thursday morning after Governor Phil Murphy signed sports betting into law on Monday.
Delaware, which was simply waiting for the Supreme Court to strike down the Professional and Amateur Sports Protection Act (PASPA), took its first sports bet last week with no integrity fee in place. The First State has had language on the books to allow legal sports since 2009.
Michigan Lawmaker Isn’t Too Excited About ‘Integrity Fee’ and No Other State Has Passed Sports Betting Law With a Payout to the Pro Leagues.
Iden and lawmakers across the country are watching as other states begin to pass laws and implement sports betting. And the idea that no state has an integrity fee so far likely doesn’t bode well for the professional leagues.
“At the moment, I think (the integrity fee) is a non-starter,” Iden said Wednesday. “It’s important that all the states do something similar and I don’t want Michigan to be different or put Michigan at a competitive disadvantage.”
Among the issues surrounding the integrity fee is that sportsbooks would be at a disadvantage against black market sportsbooks that don’t have to pay federal taxes, state taxes, large licensure fees and possibly a fee to the leagues. So they might be forced to pass along a cost to consumers. For example, instead of putting down $110 to win $100 on a game in Las Vegas, bettors may have to lay down $120 to win $100 against the spread in a state with an integrity fee or high state taxes (like Pennsylvania, currently levying a 36 percent tax on gross gaming revenue ).
Another issue Michigan will have to manage before making sports betting law is how to handle pro sports owners who also own casinos. Illitch Holdings, the company that manages the empire built by Mike Illitch, currently owns both the NHL Detroit Red Wings and MLB Detroit Tigers, as well as the MotorCity Casino. Just last week, the state of New Jersey tackled a similar issue, amending its sports betting law to allow sports betting with the exception of on the NBA at the Atlantic City casino owned by Houston Rockets owner Tilman Fertitta.