Michigan’s Outgoing Governor Says ‘No’ to Online Gambling

Michigan’s outgoing Governor vetoes online gambling bills due to concerns over the financial and social impact of the practice

Hopes that Michigan would soon join the handful of states that offer legal online gambling died on Friday as outgoing Governor Rick Snyder vetoed three bills that called for the legalization of the practice.

Gov. Snyder took action on a number of bills this past Friday as he prepared to surrender his office after two terms at the helm of Michigan. The bipartisan legislative effort to bring online gambling to the state was among those to get a big ‘no’ from the state’s highest ranking legislator.

Gov. Snyder vetoed House Bill 4926 and its accompanying pieces HB 4927 and HB 4928, citing concerns over the financial and social impact of the legalization of online gambling on the state’s territory.

HB 4926 was approved by the Michigan House of Representatives this past June. There was no further action on the piece of legislation up until earlier this month. In a last-minute effort, the Senate passed the bill just a few days before Christmas to send it to the Governor’s desk.

If Gov. Snyder had signed the legislation, it would have allowed the state’s three commercial casinos – MGM Grand Detroit Casino, Motor City Casino, and Greektown Casino – as well as casinos operated by Michigan’s federally recognized tribes to offer online casino and poker games within the state’s borders.

The Michigan Gaming Control Board would have issued licenses for the operation of online gambling. Licensed operators would have been taxed at 8% on their revenue from the practice. The state’s commercial casinos would have had to pay an additional 1.25% to their host cities.

Easier to Gamble

In a veto letter to the state House and Senate, Gov. Snyder said that while he appreciated the amount of work that went into the online gambling legalization effort, there were several important issues that prompted his veto.

The legislator pointed out that the introduction of online casino games and poker could shift have shifted residents’ gambling behavior from the state’s iLottery program to Internet-based gambling at local casinos. He went on to say that under the proposed tax structure, the state’s School Aid Fund would have only got four cents for each $10 wagered online. In comparison, the Michigan Lottery contributes $2.76 to the fund for each $10 of spending.

Gov. Snyder also said he was concerned that the bills “will encourage gambling by making it much easier to do so.” As a result he did not want to sign legislation that would proliferate gambling, while there would be a “reasonable chance” that the state could lose revenue for social services.

The legislator concluded his veto letter by saying that he would leave it to Michigan’s next administration to review more thoroughly the revenue implications from the authorization of online gambling.

Gov. Snyder also vetoed this past Friday a bill that would have created a framework for the provision of fantasy sports betting in a regulated environment, saying he did not believe the legislation could produce positive results for the state at this time.

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