So, you think it’s easy to pass a sports betting bill? In Michigan, just introducing one is a yearlong effort.
Rep. Brandt Iden is on draft No. 7 of his sports betting proposal, and it’s still not ready for primetime.
Iden expected to introduce his sports wagering and internet gambling bills together at the beginning of this session. However, he held back sports betting when he introduced the iGaming package in March.
He planned to enroll the legislation in May to catch up to the rest of the gambling bills in committee, only to pull it back at the last minute.
Speaking to Legal Sports Report at the National Council of Legislators from Gaming States (NCLGS) summer meeting in Minneapolis last week, Iden asserted that the next draft is the one. He plans to introduce the sports betting bill in late August finally.
Anatomy of the Michigan sports betting draft bill
The latest draft Iden provided to LSR is similar to the previous one floated in May. Highlights include:
- Fees of $200,000 for an initial sports betting license renewable annually for $100,000, $50,000 for a skins license and $5,000 for a supplier.
- A tax rate of 8% on adjusted gross sports betting receipts.
- The Division of Sports Betting must finalize rules within one year of bill enactment.
- Sports governing bodies can request to prohibit wagers by event or type.
- The regulator determines whether official league data is necessary and appropriate to decide the results of in-play wagers.
This draft cuts the number of permitted online sports betting sites by two-thirds. Previously, the 12 gaming tribes and three commercial casinos could have partnered with a management services provider to offer up to three branded online sports betting platforms. The latest draft limits them to one.
Iden standing ground on sports betting fees/tax rate
Gov. Gretchen Whitmer sanctioned an analysis by the Michigan Department of Treasury in early June. She requested a 15% tax rate on sports betting and a tiered initial licensing fee. This would amount to $1 million for the three commercial casinos in Detroit and the four largest tribal casinos in the state.
Iden asserted that there is room to work with the administration on the iGaming figures, but that sports betting needs to stay where it is.
“My position continues to be that, even if the iGaming tax rate changes — which the likelihood is that it will be increased – the sports rate has to stay low in order for it to be competitive,” Iden said. “There just isn’t a tremendous amount of revenue in sports betting. It’s important that we keep that low, and the administration needs to understand that for it to be successful, it has got to be low.”
Data mandate for in-play wagers likely to make the bill
Iden indicated that one change he expects to see in the final bill is a tweak of the language on mandating the use of official league data for in-play wagers.
He sees the concession to leagues as key to getting their support and not detrimental to the industry.
“I don’t have a problem with using official league data for in-play bets,” Iden said. “If it gives us an opportunity to bring leagues into the conversation, I think that’s important. In order for the market to be robust, the leagues have to play some sort of role.”
He added that the final bill would have the language to make sure the leagues aren’t overcharging for their data.
Michigan governor is missing the mark on sports betting
Whitmer’s release of the Treasury Department analysis torpedoed any chances for Iden’s gambling package to move before the summer break.
Now the Republican leadership of both legislative chambers and the Democratic governor are embroiled in a disagreement over funding the budget and infrastructure plan.
The legislature scheduled dates through July and August to discuss the budget. Iden doesn’t expect sports betting to be addressed until after budget negotiations conclude.
Given that the deadline for officials to agree on a budget for the next fiscal year is Sept. 30, it could be October before sports betting legislation becomes a focus in Michigan.
“The governor’s office continues to miss the major point of this whole thing, which is consumer protection,” Iden said. “This is going on in the marketplace, and she’s just blatantly ignoring that. The Attorney General doesn’t seem to want to prosecute anybody who is running illegal books. The fact that the administration doesn’t care about this issue and it’s impacting families and hurting people is scary.”