For some time, Representative Brandt Iden of Michigan has struggled to see his state gain ground in the fight to legalize online gambling. An effort in 2018 made it straight to the former Governor’s desk only to be vetoed. This year, Iden has faced issues with the new Governor, Gretchen Whitmer. After the governor’s office refused to speak with Iden in session, it seems another lawmaker has been able to open the door to begin negotiations once again.
Senator Curtis Hertel Jr. has been able to start working on negotiations between the governor and gaming participants, finding ways to tackle the tax rate issues so that everyone is happy. The governor wants a higher tax rate on online gambling services due to fear that the online lottery will suffer losses which will lead to less revenues for the state.
According to Hertel, the governor has backed down some regarding her demands from last summer. She remains concerned about the School Aid Fund and wants to ensure that money still comes in. While she has a right to be worried, lawmakers working on the legislation regarding online gambling and sports betting expansions have made sure that the fund would be taken care of.
What’s Happening Now?
Right now, discussions are taking place to get everyone at an agreeing point. Governor Whitmer is supportive of a tiered tax rate that reaches 43.25% for commercial casinos and 40% for tribal casinos. This is course ridiculously high and something that would keep operators from even applying for online gaming licensing.
For Iden, the rate needs to be around 8 to a little over 11 percent. This would keep stakeholders happy and still provide much-needed revenues for the state. Iden hopes the governor will be on board because the rates could still be tiered. Operators would be taxed a certain percentage based on how much is generated in revenues, from under $4 million to over $12 million.
The tax rate would stay the same for a three year time frame and then rates would go up by 2% over a two year time period until hitting the permanent level. On the high end, the tax rate would come in at 26.25%.
This number, even though it is relatively high, is not good enough for the governor apparently. For now, the goal will be to come to a tax rate percentage that makes the governor willing to sign the legislation into law and will keep stakeholders in the mix, wanting to apply for licensing.
The process of seeing online gambling come to fruition in Michigan still has a long way to go. For online gambling proponents, at least Iden remains optimistic and a proponent for the industry. Hopefully, in time, the governor will get on board and allow an industry to come to fruition that players want to have access to. Only time will tell if everyone can come to a compromise to allow an iGaming bill to become law.