House Committee Chairman Proposes Michigan Sports Betting Plan
With the hope of getting legislation passed by the end of the year, state Rep. Brandt Iden, a Republican from Oshtemo Township, has proposed a sweeping plan that would legalize sports betting in Michigan.
Iden’s plan came together after the representative spent time listening to the demands of vendors, operators and sports leagues and crafting a high tax plan for the implementation of wagering.
Governor Gretchen Whitmer’s administration has been resistant to negotiate with Iden, but the Republican representative expected resistance from the Democrat’s aides. Spokespeople for Gov. Whitmer have repeatedly expressed reservation with legal sports betting due to the concern that it would hurt funding for public education in the state.
Spokeswoman for Gov. Whitmer, Tiffany Brown, told The Detroit News, “The administration has taken every meeting we’ve been invited to regarding this legislation, and we continue to work closely with the bill sponsor, tribal leadership and stakeholders to attempt to address our concerns.”
Iden expected that amendments and other legal issues would be ironed out early this week as the bill works its way through the House Ways and Means Committee that the state rep. chairs.
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What is New About Iden’s Bill?
One of the major changes to Iden’s bill, when compared to other legislation that has failed to meet the standards set forth by the Governor, is an elevated tax rate. Early bills put forth an 8% rate but Gov. Whitmer has asked for a 40% rate with online gaming and a 15% tax rate for sports betting.
Iden expressed frustration with the current administration’s lack of interest in negotiating a more reasonable rate, telling The Detroit News, “It’s too bad that the folks have been too busy to engage, but we have to move forward with the minimal amount of session days left.”
Since Michigan’s gaming operations fall along with three casinos in Detroit and then 23 casinos that are run by tribal groups in the state, each faction will receive their own tax rate in Iden’s proposed bill.
Rep. Iden is proposing an 8.75% tax rate for the tribal casinos and a 12% rate at the gaming locations in Detroit. The elevated rate in Detroit is due to a city-imposed 3.25% tax on top of the state rate.
Iden’s legislation would also counter the 40% tax rate on online gaming suggested by Whitmer to a rate of around 23% for tribal casinos and 26.25% for Detroit.
The bill has received bipartisan support in both the House and Senate and this momentum has pushed Iden to declare “it’s imperative that we move quickly before the end of the year.”
Will Iden’s Plan Incorporate Integrity Fees?
In a surprising development, Iden told The Detroit News that he has already negotiated integrity fees with the National Football League (NFL) and Major League Baseball (MLB).
Integrity fees continue to be a source of aggravation for states looking to legalize sports betting as lobbyists for the professional leagues continue to push legislators for a slice of the tax revenue created by their games. To date, no state has agreed to integrity fees and it’s a longshot to believe that Michigan will be the first.
As the plan works through committees, it has yet to be seen how the current administration of Gov. Whitmer will act to influence the final bill, leaving Iden hopeful that the state might legalize by the end of the year.