Once again, a package of Michigan gambling expansion bills is on the precipice of becoming law. The governor’s signature is almost certain, unlike last time.
Although it’s unclear exactly when Michigan Gov. Gretchen Whitmer will sign the bills legalizing iGaming and online sports betting, all the indications point toward her doing so. All the bills cleared the Wolverine State House and Senate on Wednesday.
What’s in the Michigan gambling expansion bills
The package of several bills brings a massive expansion of legal gambling to the Wolverine State. That expansion includes daily fantasy sports, internet gambling (slots, table games), online poker and sports betting.
Both the Michigan House and Senate approved the package Wednesday, the result of months of negotiations between gaming operators, legislators and Whitmer. In the bills, there are wins and losses for all involved.
Legal sportsbook operators claim the biggest win. Legislators reduced that tax rate to 8.4% in the final negotiations, and the licensure fees stagnated at $50,000 to apply, $100,000 for the initial license and a $50,000 renewal.
DFS operators will pay the same tax rate. Their license fees are far less imposing, however, at $10,000 on first licensing and $5,000 to renew each year.
The tax rate on online poker, slots and table games is 23%, but an additional 3.25% will go to the city of Detroit, making the effective rate for such operators 26.25%. Though that’s a significant rate, it was necessary to get Whitmer’s support.
Her signature is the final step to making this all a reality. At this point, it seems like a formality.
Gov. Whitmer ready to make gambling history in her state
According to Tiffany Brown, a spokesperson for Whitmer, the ink will dry quickly.
“The governor is pleased with the progress made on gaming over the course of this year, particularly once Sen. Hertel and Rep. Warren were able to engage and resolve key issues to get this package across the finish line. … This is a good, bipartisan solution made possible by working together on a complex issue, and the governor looks forward to closely reviewing this package once it hits her desk.”
Whitmer has additional options besides signing as is and vetoing the bill entirely. Michigan’s constitution gives the governor line-item veto power, so she could sign the bills into law but exclude any sections she finds unacceptable first.
She has used that power once already. When the state passed a budget for the current fiscal year, she omitted several items from her final version.
Unless she goes rogue, however, most of the important parts of these bills should become law soon. One particular piece of legislation is controversial, however.
HB 4307 and why it’s a problem for the state government
The story of legal gambling in Michigan marks 1996 as a significant year. That was the year that the state changed its legal landscape to allow commercial casinos.
Part of the law makes it illegal for gambling corporations in Michigan to contribute to political interests. House Bill 4307 repeals that part of the law and was part of the package sent to Whitmer on Wednesday.
While it’s possible Whitmer may veto the bill, it’s unlikely she will do so. This is a concession to the gaming industry in the Wolverine State, necessary for it to agree to the tax structure.
If this bill becomes law, the wall that kept gambling money directly out of Michigan politics will be torn down. Admittedly, there has always been a loophole of gambling company executives being free to make donations to political initiatives as private citizens, but this change could still represent a step backward in getting special-interest money out of state government.
For now, all of Michigan will have its eyes on Whitmer. Her signature could dramatically change the status quo in her state.