Michigan Lawmakers: Show Us the MoneyBy Jill R. Dorson | Published: May 11, 2018 at 10:00 am
When Brandt Iden (R-District 61) was elected to the Michigan State Assembly in 2014, he probably thought his job was to shape the law. But in the intervening years, he’s learned that in order to best do that job, he must also be a student, teacher and mediator.
The champion of one of the Michigan sports betting bills, Iden is itching to get legislation passed, but he’s had to tamp down his expectations as both he and his fellow House members have learned more and more about how sports betting in Michigan will play out, and have perfected the art of negotiating with the many players (tribal interests, gaming operators, and professional sports leagues, to name a few) involved in getting a bill to a full House vote.
“Conversations with the tribes have been going on for one-and-a-half years, and I think we’re in a good spot,” Iden told Sports Handle of working with Michigan’s Native American gaming interests. “They are still opposed to the bill, but not as staunchly as they were. … Right now, for me, it’s about educating my peers. And I do believe we are going to reach a middle ground with the tribes.”
Democrats and Republicans Are Teaming Up to Craft and Advance Michigan Sports Betting Legislation
Michigan currently has three commercial casinos in Detroit as well as more than a dozen tribal-owned casinos across the state. Michigan is also competing with Windsor, Ontario, Canada for casino dollars. The city is home to Caesars Windsor, a commercially owned, full-service casino that includes a sportsbook. Caesars is less a half-hour drive across the Detroit River from downtown Detroit.
Iden’s bill, HB 4926, is among four bills in the Michigan House. This bill, according to Iden, would “allow every brick-and-mortar, including tribal, to allow all the current games in-house and online,” including sports betting, should the Supreme Court all states to legalize sports wagering. The high court is currently considering Murphy v NCAA, the case brought by the state of New Jersey contesting the legality of the Professional and Amateur Sports Protection Act. The 1992 law effectively makes sports betting illegal everywhere except Nevada. A decision could come as early as Monday, but is expected before the Supreme Court session ends in June.
They say that politics make strange bedfellows, and as such, Iden has been working with fellow representative Robert Kosowski (D-District 16), who currently has three sports betting bills (HB 4060, HB 4261, and HB 4529) in the House. Kosowski’s bills address legalizing sports betting across the state and allowing sports betting at state lottery terminals. He says he has deferred to Iden, who is in the Michigan House’s majority and is the chairman of the Regulatory Reform Committee, where all the bills currently sit, on the tribal issue, but the two are aligned when it comes to the end game and both have been vocal about legalizing sports betting in the media.
“We’re taxing our residents more and more every year,” Kosowski said. “And I was just trying to think of ways to get more money into the state. … I’m very enthusiastic about this. People ask me, well you must gamble? I do, I put money on the Super Bowl. I can go right to Windsor (Canada), I can take a quick five-minute toll road and be there in 10 minutes.
“Look at all the money we’re losing with me eating there, betting there, bringing my friends there.”
Said Iden: “I think it’s very important (to be among the first movers). I’ve been outspoken on this issue for that very reason. Sports gambling is going to come, I think it’s inevitable. And I think Michigan needs to be out in front of the conversation.”
Both Iden and Kosowski say they have time — the assembly will take a summer break, but is in session year-round — but both believe that moving quickly is of paramount importance.
Sponsors of Michigan Sports Betting Bills Agree in Principle Regarding Mobile Gaming, Taxes and the ‘Integrity Fee’
So where to both Iden and Kosowski stand on the key issues?
Both support the idea of sports betting via the internet and both are careful to say that their bills, and the state, will have provisions for helping those who develop gambling issues. And both see the synergy between mobile gaming and the brick-and-mortar casinos that host it.
Iden’s bill originated as an iGaming measure, but has morphed to include sports betting, because, Iden says, he believes the two are intertwined.
“I see the issues as combined,” Iden said. “The bill certainly stared out as internet gaming, but as the reality of sports betting became more of an issue, I think it’s really going to become the main issue.”
From Kosowski’s standpoint, he’s also in favor of internet gaming, and he’d even be willing to concede that bettors should be able to make remote deposits, though he’s quick to say that those deposits should come from debit cards, not credit cards — “I don’t think people should be using a charge card to gamble. At a casino, you can use the ATM, but you can’t put your card down on the table and bet $5,000,” he pointed out.
Remote deposits aside, Kosowski isn’t just open to mobile sports betting, but he’d like to see sports wagering at lottery kiosks, as well.
I think we should “accept sports betting at our lottery terminals,” he said. “Why shouldn’t I be able to walk up as I’m buying milk or beer, why can’t I look at the line and put down $20 on the Lions? It makes it more exciting.”
While both legislators are in favor of iGaming, both also believe that bettors should be required to register in person at state casinos. Besides allowing casino staff to verify who is registering, Kosowski says that in-person registration will bring patrons into the casino, which in turn will generate revenue for the casino, and with any luck, that additional business will create more jobs.
Critics of this approach view the requirement as both antiquated given the abundance of technology to conduct to secure transactions online, and also an impediment to bringing participants in the sports betting black market into a state framework. In other words, an unnecessary hurdle that would encourage the black market to remain in the dark.
Iden’s bill has been amended to call for an 8 percent state tax on iGaming revenue, which is less than the 15 percent that brick-and-mortar casinos currently pay on gaming revenue. The 8 percent number, according to Iden, came from an existing tribal compact that he said was easier to adopt than try to alter. Kosowski said he’s “fine with whatever number, he’s in the majority and I’m in the minority, I just want sports betting.”
Michigan Representatives Believe That Sports Betting in the State Will Involve an ‘Integrity Fee’ of Some Sort.
Pro League “Integrity Fee”
Neither Iden nor Kosowski has addressed the pro league-friendly “betting right and integrity fee” in their bills. Specifically, the NBA and Major League Baseball have been lobbying for a 1 percent integrity fee, which translates into 20 percent of a sportsbook’s revenue. Nevada does not pay any such fee to the leagues, but some states have been entertaining the possibility of some modified version of it, while some states have recoiled at it. Iden and Kosowski see the fee as an inevitability.
“I continue to have conversations with the leagues about the integrity fee,” Iden said. “They’re just getting started in that process … I haven’t really weighed in on the issue, but suffice to say all the leagues haven’t decided what to do yet. I think that you will see some form of the integrity fee, but not in its current form. Eventually it will sort of work itself out.”
When asked if he could see Michigan including an “integrity fee” in a sports betting law, Kosowski said, “Probably. I don’t know what that number is. It would help the game, it would help the leagues.” He went on to suggest that rather than earmark integrity fee revenue for monitoring, maybe the NFL could consider earmarking it for its concussion protocol or substance abuse programs.
In the biggest picture, Iden and Kosowski have a single goal: to make sports betting legal in Michigan. Iden staunchly believes that consumer protection is the key reason for legislation while Kosowski wants better roads. Both are clear that they believe there is plenty of illicit gambling already going on and why shouldn’t the state capture the potential revenue?
“There is no revenue now because there is no regulation,” Iden said.
Echoed Kosowski: “As legislators, we have to find a way to stop raising taxes. People can’t afford it anymore.“