GOP lawmaker wants sports betting rules by Super Bowl

Beth LeBlanc
The Detroit News

Lansing — A Republican lawmaker who’s been pushing for gambling expansion in Michigan hopes to have new rules governing sports betting in place by the Super Bowl.

Rep. Brandt Iden, R-Portage, told lawmakers Tuesday that he continues to negotiate with Democratic Gov. Gretchen Whitmer regarding the tax rate that would accompany that betting option and several others that Iden introduced in a separate package.

The three sports betting bills discussed Tuesday in the House Regulatory Reform Committee would authorize the Michigan Gaming Control Board to create rules governing online or in-person sports betting at Michigan casinos and tax those activities at a rate of 8%.

This Oct. 25, 2018 photo shows employees at the new sports book at the Tropicana casino in Atlantic City N.J., preparing to take bets moments before it opened. NBA and MLB executives staunchly believe their leagues deserve a cut of sports betting revenue. But their problem has been convincing anyone else in the sports betting world. (AP Photo/Wayne Parry, File)

The proposed tax rate has been a stumbling block for similar legislation that would legalize Internet gaming. Whitmer’s administration has worried the advent of additional gaming options would pull from existing gambling operations — such as the Michigan Lottery and brick-and-mortar casino operations — that pay a higher tax rate benefiting Michigan’s public schools.

Because the budget office estimates the current proposal would lead to a $28 million annual projected loss to Michigan public schools, it has instead suggested a tax rate of up to 40% for online gaming and 15% for sports wagering.

The governor's office remains concerned about the legislation's impact on school aid, but is willing to discuss the issue further, Whitmer's spokeswoman Tiffany Brown said. 

"We initially submitted suggestions to a draft bill and anticipated that we would have an opportunity to review an updated draft before the bill dropped," Brown said. "However, that did not happen."

Iden estimates the expected $225 million in new tax revenue internet gaming would generate would not pull significantly from gaming profits from existing options and said the proposed 40% tax “isn’t even in the realm of possible.”

“I’m willing to come up to 9, 9 and a half," Iden told reporters Tuesday. "I think we could probably even maybe get to 10, potentially. I’ve thrown these numbers out for the governor and I’m just waiting on a response for this."

Indiana’s tax rate is 9.5%, Iden told lawmakers Tuesday, while recounting a weekend trip to a casino in Indiana where he was able to bet on the University of Michigan football game and the Detroit Lions game.

“Like many consumers who are interested in gaming, it's very simple, if there are more options available for me as a gamer, I’m going to go where those options are available,” Iden said.

The Regulatory Reform Committee will likely vote on the sports betting package next week, said Rep. Michael Webber, the Rochester Hills Republican who chairs the committee.

Should the committee pass the package, it would move to the House Ways and Means Committee, where the internet gaming package also waits on tax rate negotiations between Whitmer and Iden.

“I’ve not advanced those to the floor until we can find resolution with the administration,” Iden said.

The Internet gaming package — which would allow and regulate online casino games, online fantasy sports contests and advance-deposit wagering in horse racing — was vetoed by Republican former Gov. Rick Snyder last year because of concerns regarding the potential tax revenue the additional options would divert from the school aid dollars generated through current operations.

This session's version of the Internet gaming legislation includes a repeal of a 21-year-old provision banning casino licensees and their employees from making political contributions.

Lawmakers have argued online gaming, fantasy sports, and sports betting already occur illegally and the proposed legislation would offer legal, taxable options to gamers.

But the tax rate on those options can’t skyrocket if the state wants to remain competitive and make it worthwhile for the three Detroit casinos and 23 tribal casinos to offer the options, Webber said.

“I think we have to cognizant of what these other states around us are doing with it,” he said.