The legislation — HB 4916 — was stuck in committee for several months before the committee vote on Tuesday sent it to the House floor.
The measure is facing the threat of a veto from Gov. Gretchen Whitmer. Whitmer wants an effective tax rate of more than 18%, while proponents of the bill in its current form are pushing a 12% effective rate. The Detroit commercial casinos pay a 19% effective rate on slots and table games.
The sports betting bill passed the House by a 63-45 vote. Two House lawmakers did not vote.
In order to override a potential Whitmer veto, two thirds of the members of the Michigan House and Senate must vote in favor of the override, according to the Michigan Legislature’s website.
If House support for sports wagering remains at its current level, an override would not be possible.
According to an analysis from MI Bets, 51 Republicans and 12 Democrats voted for the bill. The sponsor of the legislation, Rep. Brandt Iden, is a Republican. Whitmer is a Democrat.
The Republican-controlled legislature and Whitmer have been at odds this year over the budget, as partisan political struggles are nothing new for Michigan.
A handful of Republicans voted against Iden’s bill. Given the party’s backing of the legislation, it appears likely that at least some of those nay votes came from folks who generally aren’t fond of gambling. It may be impossible to sway those House lawmakers to support the legislation.
A dozen Democrats voted for the bill despite Whitmer’s disapproval. It’s unclear how those folks would vote if an override was attempted. Iden has said he would look into overriding the veto.
The legislation is now with the state Senate, where it’s expected to soon be debated. It’s unclear if the legislation can be tweaked to the liking of Whitmer’s administration.
A separate piece of legislation — HB 4311 — would legalize online casino gambling in Michigan. Whitmer has more concerns about that bill because it includes the legalization of online slots, which the administration believes pose a greater cannibalization threat to the iLottery than online table games and online/mobile sports wagering. Whitmer also objects to the tax rate in the iCasino bill.
The reason why the administration is concerned about the iLottery is because the Michigan Lottery contributes handsomely to the School Aid Fund. Whitmer campaigned as an advocate for public education.
There is more room to negotiate on the iCasino bill, so it is possible that in order to enact a 12% effective rate for sports wagering, more changes might be made to HB 4311.
At last week’s Ways and Means Committee meeting, Iden said that the new version of the iCasino bill calls for a tiered tax rate, with online casino revenues subjected to a rate as high as 26.25%. Whitmer’s administration indicated earlier this year that it wants a tiered tax structure with a rate as high as 40%.
The iCasino bill cleared the House last Wednesday by a 62-46 vote, also far short of what would be needed to override a veto. Late last year, former Gov. Rick Snyder, a Republican, vetoed the iCasino bill out of similar concerns. Snyder said explicitly that he would let the next governor decide what to do.
An override of Snyder’s veto was not attempted.
“We continue to have revenue concerns regarding the bills’ negative impacts on the School Aid Fund,” a Whitmer spokeswoman told the Associated Press last week. “The administration has taken every meeting we’ve been invited to regarding this legislation and will continue to work closely with the bill sponsor, tribal leadership and stakeholders to attempt to address our concerns.”