Michigan Online Gambling Bill Awaiting Governors Signature
For those following legal developments in Michigan, it has seemed like the state would punt online gambling regulation into 2020. However, recent negotiations have resulted in a new bill that has now been pushed through the legislature and now sits at the desk of Governor awaiting a signature.
The revised iGaming bill brings some significant compromises over the initial bill but addresses the concerns raised by the Governor. As such, she is expected to sign the bill into law sometime this week.
Changes Include Tax Rate Of At Least 20 Percent
As we’ve reported previously, there have been heavy negotiations regarding H 4311 with the biggest sticking point being taxes. Senator Curtis Hertel Jr has been negotiating with the Governor’s office in an attempt to come to a compromise and such a compromise has been reached.
Last week, H 4311 was amended to reflect changes in the bill and under the measure, the state’s three commercial casinos and all 23 tribal casinos will be able to apply for online gambling licenses. Table games, online poker, and online slots are among the activities allowed under the bill. This is important as initially Governor Gretchen Whitmer was opposed to including online slots in the bill.
The biggest sticking point regarding this bill was taxes and a new tax structure has been implemented. The tiered structure is based on total revenue and is as follows:
- Under $4 Million – 20%
- $4 million to $8 million – 22%
- $8 million to $10 million – 24%
- $10 million to $12 million – 26%
- Over $12 million – 28%
The new tax structure was done to help support the School Aid Fund, something that Whitmer worried would see reduced funding via cannibalization. The new tax structure helped to alleviate those concerns.
Also, the First Responders Presumed Coverage Fund will also be supported by this bill. Under the bill, the fund will receive $4 million a year from tax revenue collected. Online gambling will provide $2 million while online sports betting will provide an additional $2 million.
According to Hertel, “That’s what it took to get the governor’s support. The state takes in $90 million in internet lottery for schools, so it’s important to protect that in this process. The goal is to make sure the School Aid Fund didn’t have any loss.”
Bill Now Awaits Governors Signature
After the revision of H 431, the Michigan Senate pushed the measure through with a vote of 35-3. The House then concurred with the bill later in the day. The bill was then sent to Governor Gretchen Whitmer for signature.
Based on the changes in the bill, Whitmer is expected to sign the bill into law. It was sent to her desk on Wednesday. The legislative session is now concluded for the year, so if the Governor does an about-face or decides she wants other changes, the bill will be moved to 2020. However, most expect Whitmer to sign the measure into law.
Launch Will Depend on Speed of Tribal Casinos
One interesting thing to note about this bill is that there’s a clause that will prohibit commercial casinos from gaining an advantage on tribal casinos, and vice-versa. Under the measure, commercial casinos are prohibited from launching online gambling sites until at least one tribal casino is licensed and ready to launch. The same holds true for tribal casinos.
We can assume that commercial casinos will race to get their products ready for launch once they are allowed, so any delay in the launch of online gambling in Michigan could lie with tribal casinos. Regardless of what happens, don’t expect to see either side launch online gambling until the second half of 2020.