Ahead Of Sports Betting Debate, Tribe Touts Casino Economic Benefits To Michigan

Michigan's tribal casinos have stayed mum about sports betting, but one tribe recently published a study on how its gaming helps the state.
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Michigan’s 2019 sports betting efforts will feature discussions on how to incorporate both the state’s commercial casinos in Detroit and the tribal casinos sprinkled around the state. Ahead of the legislative push, one of the state’s tribal gaming groups has published a new study on its economic benefits to the Wolverine State.

The Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, also known as the the Gun Lake Tribe, found that between 2011 and 2017 the tribe added nearly $1.5 billion to Michigan’s GDP. The tribe operates the Gun Lake Casino in Western Michigan, which opened in 2011.

The analysis, prepared by the Innovation Group out of New Orleans, Louisiana, found that revenue-sharing payments to the state and local governments were about $109 million from the date of the casino’s opening through the first half of 2018.

Gun Lake’s position in Michigan

According to a 2017 state report, the Gun Lake Tribe was No. 3 among the tribes in terms of revenue sharing. The bulk of the money from the Gun Lake Tribe goes to what is known as the Michigan Strategic Fund, which is a state economic development agency with broad authority to stimulate the local economy.

Michigan’s two dozen tribal casinos (operated by 12 unique tribes) collectively shared about $87 million of their gaming win in 2017 with local governments and the state, according to Michigan.

By comparison, Detroit’s three commercial casinos collectively provided about $245 million in taxes to Michigan and the city of Detroit from January through October of 2018, according to the most recent Michigan Gaming Control Board report. While Michigan has a robust tribal gaming market, the commercial casinos in the Motor City generate significantly more tax revenue.

In other words, the Detroit casinos have greater pull in Lansing.

Local sportsbooks?

“Given its location between Grand Rapids and Kalamazoo, the Gun Lake Casino has a local impact covering five counties: Allegan, Barry, Kalamazoo, Kent, and Ottawa,” the study said.

According to the tribe, about 1,000 people are employed at the property, with an average compensation of $35,000, and it spends about $20 million each year on goods and services from Michigan vendors. On an annual basis, Gun Lake contributes $110 million in GDP into the local region in “direct effects.” The tribe’s contribution “ripples out into other sectors of the economy,” creating an estimated 2,500 jobs altogether and an overall GDP impact of $212 million.

Though Michigan’s tribal casinos have taken a wait-and-see approach to sports betting, it’s safe to say that they have a strong case for offering brick-and-mortar sports wagering to residents in counties outside of the Detroit metropolitan area. Michigan’s sports betting plans include online/mobile adoption that would be available statewide.

Michigan is projected to see roughly $550 million to $600 million in annual sports betting spend if online/mobile is in the equation.

Sports betting is considered Class III gaming under the Indian Gaming Regulatory Act of 1988, which means that it is possible the tribes could launch sports betting on their own, without state help. The odds could increase if Michigan becomes more serious about mandating that the Detroit casinos fork over a slice of their sports betting revenue to the leagues in the form of a royalty. The state lawmaker leading the efforts has started to entertain the idea of a private tax.

Online gaming bill still on table

We won’t know the fate of Michigan’s online casino legislation until later this month, as there still are days left for the Senate to pass it.

The legislation from State Rep. Brandt Iden, a Republican, passed the House in June. It has shell language pertaining to online sports wagering, so there will have to be another sports betting bill in 2019 regardless of what happens to HB 4926. The measure calls for tribal involvement in online gaming.

There’s a strong possibility that a full-fledged sports betting bill would be merged into the online casino legislation if HB 4926 dies before the end of 2018.

Iden told MI Bets in an interview that he has the support of “numerous stakeholders,” but not all of Michigan’s stakeholders. He has indicated that his gambling expansion plans have not received tribal consensus, but that tribal consensus is not necessarily needed to approve either online casino or sports wagering.

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