The Michigan Legislature and Gov. Gretchen Whitmer are inching closer to a deal to legalize sports betting and online gambling on the territory of the state, with final votes on the matter expected to take place this week.
Michigan already offers a number of gambling options, including three commercial casinos in Detroit, 24 tribal casinos around the state, and the state-run Lottery that also offers online products.
A set of bills discussed by legislators could add betting on sports and online gambling to the already existing options, if those get the required support in the Legislature and by Michigan’s top lawmaker.
Gov. Whitmer has expressed concerns that the addition of new gambling options could create a “substitution effect” that could see people playing online lottery switch to poker and other Internet games, and this would affect lottery tax revenues as new online gambling products begin to gain more and more popularity.
For a net win of $1,000 from online lottery products, Michigan schools get $700. However, under the proposed online gambling legalization bills, online casino and poker products would be taxed at 19%, and less than half of that would go to schools. This means that for a $1,000 net win from online gambling, schools would get about $81.
For more than two months, the Republican Legislature and Democratic Governor have been looking to find that sweet spot ensuring that iLottery revenues would not be so severely impacted by new competition.
Progress Has Been Made
Sen. Curtis Hertel has said recently that lawmakers have made a lot of progress with industry stakeholders and Gov. Whitmer’s administration on coming to an agreement. The East Lansing lawmaker went on that they are going to make sure to address the administration’s concerns about the school aid fund and to ensure it will remain healthy in the future.
The House passed the bills calling for the legalization of sports betting and online gambling in October. The Senate and Gov. Whitmer office staffers worked over the weekend to review the proposed changes by the upper legislative chamber.
A vote on those changes could take place this coming Tuesday, one of the last days before lawmakers take a break for the holidays.
Republican Rep. Brandt Iden said that it is imperative that they make sure the state offers a competitive product in the sports betting and online gambling marketplace, and that the longer they delay on the issue, “this frankly is another day that we miss out on a dollar.”
Lawmakers and Gov. Whitmer have been at odds over how much sports betting should be taxed at. The House proposed an 8.75% rate on sports betting revenue and letting Detroit collect an additional 3.25%.
Gov. Whitmer has suggested taxing bets at 10%, 11%, or 12%, depending on the extent to which the state would allow casinos to offer online poker and table games.
Tiffany Brown, spokeswoman for Gov. Whitmer, has said that her administration “continues to work closely with all parties to find consensus on the legislation” and that the Governor has “made it clear that protecting revenues for schools is her top priority.”
The gambling expansion bills under discussion also provide for the regulation and taxation of daily fantasy sports.
Source: Michigan close to deal legalizing sports, online gambling; vote could be this week, FOX 2 Detroit
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