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Michigan residents may have an unexpected present under the tree this Christmas.
State Sen. Curtis Hertel Jr. tells Legal Sports Report that negotiations between stakeholders and Gov. Gretchen Whitmer to work out the details on sports betting and internet gambling bills are nearly complete.
“Negotiations are going well,” Hertel said. “I fully expect the bills will be on the governor’s desk and signed before Christmas.”
Hertel added that he anticipates having substitutes for the bills “that have largely been agreed upon by the stakeholders” ahead of Tuesday’s hearing in the Senate Reform Committee.
His understanding is the bills will be voted out of the committee on Tuesday, advancing to the Senate floor.
When the House passed a package of 10 bills to legalize sports betting in Michigan as well as internet gambling at the end of October, Rep. Rebekah Warren made clear that the governor would veto the legislation as written.
Hertel explained that Whitmer’s main issue was over the tax rate for iGaming and sports betting (for both online and physical sportsbooks). The administration wanted to make sure that the state and public school system got enough revenue from the expansion of gambling to ensure that there wouldn’t be negative consequences from the possibility that they could lessen the state’s online lottery revenue.
Whitmer had declined to engage with the House sponsor, Rep. Brandt Iden, to discuss those concerns all year.
Determined not to have his effort endure the same fate it did last year when a different governor vetoed the bills for similar reasons, Iden tried to make the bills more acceptable to the administration without the governor’s input.
Working with the state’s commercial and tribal casinos, he got buy-in to increase the sports betting tax rate to 8.75% for tribal casinos and 12%, including a city tax in Detroit, for commercial casinos. The iGaming tax concessions were even more substantial, with the House passing a tiered structure that would reach 26.25% for the commercial casinos at maturity.
When the bills moved over to the Senate, Hertel was able to bring the governor into discussions.
Iden is a Republican, and Republicans have feuded with the Democratic governor all year.
Hertel not only is in the same party as the governor, but Whitmer worked for his father when Hertel Sr. was Speaker of the House in the Michigan Legislature.
Hertel was able to facilitate negotiations between the governor and industry stakeholders. He indicated that the governor backed off her previous untenable demands, which consisted of an 18.25% tax rate for sports betting, including the city tax, and a 43.25% iGaming tax for commercial casinos while not allowing internet slot play.
Since changes were made to the bills in the Senate, the legislation will return to the House for concurrence before moving to the governor.