Round Two | Will Michigan Legalize Sports Betting This Time?

Michigan Representative Brandt Iden, just gave legal sports betting in Michigan another try and submitted the HB 4916 bill only last Wednesday. Getting an audience with the respective committee a couple of days ago, there is more than enough reason to believe the motion will come through.

Iden is leading this battle for the second time since his initial bill got turned down last year. According to his latest statements, all matters will need to be resolved adequately before moving forward with the legalization motion and to avoid seeing the negative past repeat itself.

The Second Legal Sports Betting Bill Is Off To a Good Start

After the previous Governor, Rick Snyder refused to sign the initial sports betting bill just before last New Year’s Eve, Representative Brandt Iden is gearing up for round two. He submitted the HB 4916 bill about nine months after the damaging defeat. That bill is tied to the online casino bill, HB 4311, which needs to be passed to open the way for legal sports betting.

In an attempt to pull at the heartstrings of the state representatives, Iden elaborated on his weekend experience while betting on sports and staying in neighboring Indiana. Cutting straight to the chase to explain the account of his weekend gamble, and the bets he placed, Brandt Iden stated that:

We have to be competitive with other states. You will lose bettors to other states. […] I present (my betting slip) as Exhibit A to the committee.

Brandt Iden

He used his weekend experience to raise the alarm among the legislators, pointing out the gaming traffic, profits, and state budget, they are losing to other states.

What’s In The New Michigan Gambling Bill?

According to the letter of the new bill, Michigan is expected to get legal mobile betting, sports betting in both commercial and tribal casino establishments, and the use of ‘official league data’ for Tier II gambling, i.e., in-game wagering.

The latter provision is a move already made by the Volunteer State, as Tennessee legislators were the first to put forward mobile-only sports betting. The Michigan bill aims to use such official data to settle in-game wagers and give the leagues their rightful place in the industry.

As of yet, a neutral, but somewhat supportive stance towards sports betting has been taken up by relevant parties – the operator DraftKings, as well as a representative from NBA, PGA, and Major League Baseball.

Another key point of discussion from the proposed law on legal sports betting in Michigan is taxation. So far, the rate stands at 8% in the initial draft, although disagreements will likely cause for a change upwards.

There’s the operators’ stance that anything up to 10% is endurable. This rate is estimated to make between $8.7 million and $11.2 million in revenue, for a Michigan sports betting market worth about $225 million roughly total.

The current Governor, Gretchen Whitmer is still holding on to concerns regarding the effects of legal sports betting on the state lottery. After all, revenue from it covers education expenses, and a plunge would see the school system left without a source of funding. What is more, she points out to the low tax rate, but her suggestion so far seems rather inadmissible in Iden’s eyes:

I haven’t talked to the administration since before the summer break, and they proposed 15%, plus the additional 3.25% for the city of Detroit. That’s an astronomical rate which just will not work- that number has to be somewhere closer to 9% or 9.5%.

Brandt Iden

Should the tax rate remain, it would see Michigan having the second-lowest rate in the USA, right after Nevada and their 6.75%. Nearby, Indiana has agreed on a 9.5% tax, while Illinois set a steeper 30% for the time when the law takes effect. Still, a leader in taxation is the state of Rhode Island, taxing the industry up to 51% of its total profits.

A Long Way From Michigan’s First Legal Sports Bets

With just the first committee session coming to a close, Rep. Brandt Iden has a long fight ahead before the end of the line. As things stand, he got off to a good start – a short session of his own impressive elaboration, followed by two questions and three cards readings.

The inquiries by Republican Chairman, Michael Webber, and Representative, Sara Cambensy, both referred to the tax matter. Out of the two, the former indicated a need to stay competitive, while Sara called for “a little more creative” approach.

Should Michigan pass this bill into law, it will join the following states with legal sports betting practices:

There are strong odds for the event, and Iden’s approach is just as sure and steady:

My goal is to have [legal sports betting] up and running by the Super Bowl. Casinos are moving forward because they know it’s going to come to fruition at some point. If we don’t do this, we will continue to lose consumers to other states, just like you lost me to Indiana last weekend.

Brandt Iden