Editorial: Lawmakers, take a bet on online gaming
At the end of the legislative session in December, former Gov. Rick Snyder vetoed a bipartisan bill to legalize online gaming. Lawmakers are reviving the proposal, and it’s worth studying.
Rep. Brandt Iden, R-Oshtemo Township, is leading the legalization push. A new package of bills has passed out of the Regulatory Reform Committee and is waiting on Gov. Gretchen Whitmer's input as it sits in the Ways and Means Committee. Iden says he wants to work with the governor to ensure the legislation doesn’t again die without a signature.
A simple search reveals numerous illegal websites where gambling is conducted without many consumer protections, leaving users open to fraud and identity theft.
Under the Michigan bills, internet gaming would become legal, allowing Michigan’s 23 tribal casinos and three Detroit casinos to create online platforms for gambling that would be regulated to ensure customer safety.
Though some worry -- as Snyder did in his veto -- that online gaming would cut into the more than $900 million the Michigan Lottery provides to the School Aid Fund, Iden believes legalizing online gaming would expand the market and attract new and younger players. After New Jersey legalized online gaming its lottery was largely unaffected.
Though the brick and mortar casinos are taxed at 19%, the bills would set the tax rate for online gaming at 8%, due to an earlier compact made between the Hannahville Indian Community and Snyder that established the rate for future Internet gaming in Michigan.
Iden says his bill would raise $150 million to $200 million in tax revenue which would go to a number of different sources including infrastructure, the Michigan Economic Development Corporation, the Agricultural Equine Industry Development Fund and the School Aid Fund.
Online gaming is already legal in Delaware, Nevada, New Jersey and Pennsylvania — and many other states are crafting legislation to join them.
"This will allow a complex gaming state like Michigan to be a leader in the marketplace," Iden says.
Since New Jersey passed its online gaming law in 2013 — with a low 9.25% taxation rate similar to Michigan — the state has reaped $1 billion in taxes.
Legalizing online gaming offers considerable potential for a state that has already embraced gambling as a source for funding government.