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In a signal that supports Michigan’s sports betting bill is gaining steam, the Native American tribes in the state have suggested they approve the current legislation that has passed the state House and is currently being debated in the Senate.
The Native tribes in the state have signed contracts, known as compacts, with the state. The compacts give tribal leadership significant leverage in the negotiations on a sports betting bill.
Last year, Michigan’s Native casinos dropped $53.4 million in tax revenue to the state’s Economic Development Corp. and the Michigan Strategic Fund. The annual take provided by the tribal casinos is significantly more than the $16 to $20 million annually that sports betting is estimated to bring to Michigan’s government.
Securing the support of the tribal casinos is essential for sports betting’s future in Michigan because if Native American leadership decided to reject sports betting and the state went ahead and launched wagering, then the tribes could decide to simply stop making payments via their agreement in the compact.
The potential legal standoff between the tribes and state could cost Michigan tens of millions in annual revenue and years of legal bills via a lengthy protracted lawsuit.
Rep. Brandt Iden, the sponsor of HB 4916, believes that getting tribal support is crucial to the bill’s success and the Native tribes just want fairness in how sports betting is regulated among gaming operators and casinos.
“I’ve worked for the past four years very directly with the tribes,” Iden told the Detroit Free Press on Monday.
For the tribes, the worry is that their casinos would be discounted because they do not have the technological advances that MGM’s casinos have in Detroit. Rep. Iden feels that the tribes will have the opportunity to invest in upgraded equipment with the additional revenue that sports betting will bring their gaming establishments.
Even with tribal support, the sports betting bill in Michigan still might not pass due to the tepid response to wagering by Gov. Gretchen Whitmer and her administration. Gov. Whitmer has signaled that the proposed 8.75% tax rate on betting revenue is far too low and could potentially hurt the state’s lottery.
The Michigan Lottery is one of the chief financial suppliers for the state’s School Aid Fund and a decrease in lottery revenue due to sports betting could affect the fund’s bottom line.
The bill has already passed in the House and has moved onto the Senate for debate. State Sen Ruth Johnson, a member of the state’s Senate Regulatory Reform Committee, shares the governor’s concern that sports betting could significantly affect the School Aid and Michigan Strategic Fund.
“The unintended consequences of new bills .. sometimes can be worse than the problem you’re trying to solve,” Johnson told the newspaper on Monday.
Although the tribes have offered support, there is more to be done as the state’s compact with tribal leadership dates back to 1993 and explicitly say that tribes operating sports betting in their casinos must have a letter from the governor or some other form of approval to offer wagering in their gaming establishments.
If the Senate approves the bill, Gov. Whitmer will be allowed time to consider additional concessions before signing the legislation, leaving the shape of the final law much in question.
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