Online gaming resurfaced in the Michigan Legislature last week.
The Michigan House Regulatory Reform Committee held a hearing on a newly amended version of Rep. Brandt Iden’s online gaming bill. The committee heard H 4926 on Tuesday, the penultimate day of this year’s legislative calendar.
Online gaming’s momentum proved short-lived. The reworked bill was voted out of the committee 12-3-1. However, because Michigan rules allow the legislature to carry bills over to the second year of the state’s two-year legislative session, the vote could set the stage for a more serious online gaming push in 2018.
A look inside the new bill
Several new changes may impact the bill.
- Online gambling servers are now required to be housed in casinos.
- The bill uses a new tax distribution scheme, most notably, lowering the rate from 15 to 10 percent.
- The legislation would pave the way for online sports betting in the Wolverine State.
The server location and taxation amendments are attempts to solve problems that have stalled online gaming legislation for the better part of two years (more on that in the next header).
On the sports-betting front, the bill now reads:
“The division may permit an internet gaming licensee to conduct internet wagering under this act on any amateur or professional sporting event or contest, if that internet wagering is not prohibited by federal law.”
As such, Michigan joins Pennsylvania as one of the states looking at legalizing online sports betting. Nevada currently offers legal online sports betting.
Did the changes solve the bill’s problems?
As PlayMichigan has documented, Michigan’s online gaming legislation must clear a couple very high hurdles.
- Concerns over the constitutionality of expanding gambling without an amendment and voter referendum;
- A lack of support from the state’s tribal and commercial casinos.
The amendment about server location aims to solve the constitutionality issue. The new bill requires casinos to house online gaming servers. This bolsters the state’s argument that online gaming isn’t an expansion of gambling; rather, it’s a new type of gambling being offered by existing operators. Whether this new requirement will appease critics is an open question.
The changes to the taxation scheme earned the legislation support from Michigan’s three Detroit-area commercial casinos. Still, tribal casinos oppose the measure as written.
Iden indicated the bill might be able to pass without tribal support. On the other hand, he said it’s more likely at least some tribes must be on board.
“I believe we can, though that’s not my intent,” Iden said. “What’s going to be acceptable to some tribes isn’t going to be acceptable to all. I’m willing to work to get common-ground language with as many as I can, and others will continue to be in opposition. You can’t always get every stakeholder’s support.”
See you in 2018
Last week’s hearing and vote cement Michigan’s place as a serious online gaming contender. Still, unsolved problems stand in the way of a bill emerging that’s capable of passing the House and Senate.