Michigan Holds Extremely Brief Hearing On Sports Betting Legislation

On Tuesday in Lansing, some Michigan lawmakers briefly talked about a proposal to legalize online/mobile and retail sportsbooks.

On Tuesday morning in Lansing, the Michigan House’s Committee on Regulatory Reform held a very short 15-minute sports betting hearing.

The only person to testify was the sponsor of the legislation, state Rep. Brandt Iden. The bill, H 4916, was introduced last week after at least seven draft versions of the bill.

Iden began the hearing by telling the committee that he traveled to the Blue Chip Casino in Indiana, just a handful of miles from the Michigan border, to gamble this weekend on football. Blue Chip’s sportsbook comes from FanDuel, which is also seeking entry into the Michigan market should the state legalize.

Iden said he saw a lot of Michigan plates in the Blue Chip parking lot.

If the legislation is able to become law this year, Iden said that Michigan could have legal sports betting (presumably retail-only at first) in time for the Super Bowl.

The legislation appears to be an underdog at this juncture.

Tax rate issue

Iden’s bill calls for an 8% tax rate on both retail and internet/mobile sports wagering revenue. The Administration of Gov. Gretchen Whitmer, a Democrat, wants 15%.

Iden’s proposed rate is lower than what is seen in New Jersey, but higher than Nevada’s.

“The tax rate remains a key issue,” Iden said Tuesday. “It is my goal to continue this conversation with the administration on the tax rate. It’s disappointing that it has stalled out at this time.”

Iden said there is room to negotiate on the rate.

Iden’s internet casino gaming bill also calls for an 8% state tax rate on internet gaming revenue, which Whitmer also thinks is too low. Additionally, Whitmer doesn’t want online slots included in that bill, H 4311, out of concern that iSlots could cannibalize some of the Michigan Lottery’s revenue from online gambling. Iden has said that they are two different customer bases.

Iden has so far indicated that online slots must be included in any internet casino legislation.

The Lawful Internet Gaming Act and the Sports Betting Act are tie-barred to each other, which means that at this moment in time, Michigan can’t legalize sports betting, even in a retail setting, without the passage of the long-sought internet gaming law that Iden has been pushing for several years.

H 4916’s current provisions

  • Mobile Betting? Yes
  • In-person registration required? No
  • State tax rate: 8% for commercial casinos only
  • Annual license fee: $200k initial, $100k renewal
  • Legal to bet on college games?: Yes
  • Fee to pro leagues: No
  • Use of “official league data” mandated?: Potentially, in-game only
  • Regulatory body: Michigan Gaming Control Board

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