Michigan´s champion of online gambling has said he will sacrifice online poker and online casinos in order to pass a sports betting bill this year.
Brandt Iden appears to be stuck between a rock and a hard place. He has a comprehensive online gambling bill ready to go, which has bi-partisan support across both of Michigan´s legislative chambers, but which does not yet have the support of Governor Gretchen Whitmer. If the bill was to pass in its current format, there is little doubt Governor Whitmer would veto it.
Whitmer´s dislike of the current Lawful Internet Gaming Act is based upon the misconception that the provision of online slots would cannibalize slots-like games on the Michigan lottery´s website. If this were to happen, revenues for the School Aid Fund would fall; and she made it clear how she felt about this when she said:
I´m not going to increase gambling in our state at the expense of school kids.
Iden Willing to Compromise, but Will Stakeholders be Equally as Willing?
I discussed the merits of Governor Whitmer´s concerns last month, where I also noted Iden was under a misconception about the appeal of regulated online gambling to the man in the street. Nonetheless, Iden is so keen to get the Governor´s signature on the Lawful Internet Gaming Act, he is willing to remove online slots games from his proposals and discuss higher tax rates.
However, the likely licensees if the bill was to pass – Michigan´s brick and mortar casinos – are not happy about the removal of online slots from the bill, as this would leave them with only online poker and online table games. As well as shelling out hundreds of thousands of dollars each year for an operating license, the proposed tax rates of between 8% and 40% would make operating in Michigan unviable.
Consequently, the latest development is that Iden is willing to sacrifice online poker and online casinos in order to get a sports betting bill across the line. Speaking with the Detroit News, Iden said that until the Governor has
a better education on the subject matter he would push ahead with a standalone sports betting bill that authorizes sports betting both online and in brick and mortar casinos.
Iden Also Has a Thing or Two to Learn
The Detroit News interview is interesting inasmuch as it confirms my belief Iden is completely in the dark about the existing options for unregulated online gambling in Michigan. In the interview, Iden raised concerns that
Detroit will start losing players [to neighboring states] if a sports betting bill fails to get passed by the end of the year.
Now I can´t speak for every gambler in Michigan, but I feel that if a Lions fan wants to get a bet on a game, he or she not going to drive for an hour to place a bet in Toledo when they can go online and place a bet with a credit card. In my experience, most gamblers won´t know whether the web site they are using is state-sanctioned or not; and, of those that do know, the majority don´t care.
It´s not necessarily the same for online poker players. Sports bettors haven´t had the same up and down experiences as online poker players (i.e. Moneymaker, UIGEA, Black Friday, etc.), and I strongly suspect many would support a regulated online poker environment in Michigan even though the rewards and opportunities are better in the unregulated market.
However, in order to get a signature on a sports betting bill, it looks as though Iden will have to sacrifice games of skill such as online poker and Blackjack in favor of luck-based sports gambling. Of course, this is all subject to an agreement being reached on tax rates, and whether or not the
expansion of gambling opportunities is frowned upon by the courts when the inevitable legal challenge is filed for expanding regulated gambling in Michigan in breach of the state constitution.