Michigan Governor Will Not Budge in Standoff Over iGaming Legislation
Anyone with hopes of seeing Michigan become the next state regulate online gambling will be waiting a while longer. According to a report on Online Poker Report, lawmakers and Governor Gretchen Whitmer are at a standoff regarding legislation, and as things stand presently, the Governor does not appear to be interested in engaging in dialog on the matter.
Whitmer Promised Veto on Present Bill Back in May
If you have not been following the state of iGaming legislation in Michigan, the state legislature is presently considering bill H 4311 which would legalize online casino gambling and online poker. Rep. Brandt Iden is the primary sponsor of the bill and has been championing the cause for a couple of years now.
Back in May, the Ways and Means Committee held a hearing on the bill and representative for Gov. Whitmer were in attendance. During that hearing, they stated that Whitmer will veto the bill as it presently stands. Last year, a bill passed both the State House and Senate and was ultimately vetoed by outgoing Governor Rick Snyder.
The primary objection by Gov. Whitmer is the tax rate. In the present draft of the bill, it is just eight percent, but Whitmer wants a much higher tax over fears that it will cannibalize revenues from in-state casinos.
The State Treasury also presented their analysis at the hearing, stating that the tax rate should be raised to at least 40%. Iden stated that those making such a proposal “have no knowledge of what’s happening in the industry.”
Treasury and Governor Want Online Slots Eliminated From Bill
The Treasury expressed concerns over state lottery revenues in their report. They believe that online slots will have an adverse effect on Lotto sales in the state. Presently, lottery sales bring in $941.3 million, with all proceed going to fund schools in the state.
What does that mean? That means as things stand currently, online slots are going to be a major roadblock for this bill moving forward. Iden recognized this and told OPR that “there may be an opportunity to move forward with other games.”
What that would mean is that online casinos in the state could offer games such as Blackjack, Roulette, Baccarat, Craps, and online poker. However, a large portion of revenue for online casino comes from online slots, and without those, the venture may be a pointless one.
Governor Not Even Taking Iden’s Calls
According to Rep. Iden, the Governor doesn’t appear to be interested in working towards a compromise. He stated that “She refuses to speak with me directly,” and instead chooses to have representatives speak for her. He said he welcomed the chance to speak with the Governor on the issues, but at the time of this writing, that has not happened.
Rep. Iden also stated that the Governor needs to educate herself more on the matters of online gambling rather than rely on the opinions of the Treasury. He called her blind support of the Treasury’s opinion as “problematic” and says she is ignoring experts in states such as New Jersey who have proven that online gambling is a companion piece to live casino gambling.
Don’t Expect a Quick Resolution With Major Concessions by Lawmakers
While the issue of online gambling legislation is not dead in Michigan, we can safely say that it is on life support and it will take major concessions by lawmakers to move a bill forward. In essence, we believe that online slots will have to be dropped from the bill entirely and tax levels raised to a point that satisfies the Governor before it has a chance of passing.
The downside to this is that it would result in a somewhat impotent online gambling market in Michigan. High taxes will drive out smaller operators and those that do participate will likely have somewhat limited offerings. Online poker may be viable if interstate compacts are reached, but otherwise, it will likely not be worth fooling with for casinos.
At this point, we would be amazed to see any real progress made in 2019 towards online gaming legislation in Michigan. Instead, we expect Rep. Iden to work on new legislation and try and form some type of dialog with the Governor before trying again in 2020.