Online gambling has been on the mind of Michigan lawmakers for years. Previous efforts have failed to come through but this year, it seemed that efforts would be fruitful. However, recent reports show that online gambling legislation in the state are still far from becoming law.
House Opposition/Governor Woes
A package with associated gaming bills was on the table in a House hearing last week when it was made known that there were opposition issues. Eight bills were under consideration during a House Ways and Means Committee meeting being chaired by Representative Brandt Iden. The Rep has been working hard to see online gambling come to pass and he cannot seem to catch a break.
According to the details of the hearing, as it stands now, the package would be vetoed by Governor Gretchen Whitmer if it were to hit her desk without any changes. Apparently, the governor’s office is not in favor of the package as it is written currently.
Bethany Wicksall, a State Budget Office executive, stated that the governor’s main concern is the potential reduction to revenues given to the state. As the bill stands now, the given tax rate plus additional new revenues from online gaming and the impact to the lottery, it has been estimated that the overall state revenue would be reduced.
It is believed that the School Aid Fund of the state would suffer a shortfall if online gaming is introduced as the bill states now. More than 25% of every lottery dollar spent goes that the education fund. The opposition has stated that online lottery gaming would give online gaming direct competition. With Iden’s proposal, the treasury would be given 10% less of online gambling revenues and only 5% would go towards the education fund.
The worry is that players will opt for casino gaming online instead of lottery ticket sales which would decrease the revenues overall for the School Aid Fund. The tax rate is much lower for the online gambling industry based on Iden’s bill, so revenues could potentially be lower for the state.
The treasury of the state also estimates that land based casino gaming totals will drop if online gambling is legalized in Michigan. A presentation during the hearing showed that online gaming could see a loss of $35.5 million due to net revenue decreases.
However, if we simply look at the state of New Jersey, it is a prime example as to how a state can be successful with online gaming, land-based gaming and so much more. Online gambling continues to hit record highs for monthly totals in New Jersey and land-based casinos have reached a steady average.
Despite the success of New Jersey, officials in Michigan feel that the proposed structure for iGaming in their state would have a different effect. Online gambling being taxed at a lower rate than retail operations could put a damper on land-based marketing by operators as they focus on online gaming.
As mentioned, Representative Brandt Iden has tried to see online gambling come to Michigan for some time now. Last year, a measure made it all the way to the previous governor’s desk, Rick Snyder. Unfortunately, Snyder decided to veto the measure after it was expected he would sign the bill into law.
Rep. Brandt had to start over and remains optimistic that his plan will eventually work. It seems this time around, tax changes may have to take place or certain concessions in order to see the new governor on board and to avoid yet another veto upset.