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Michigan Gambling Legislation Waiting for Snyder Signature

Posted on by John Lathram

MichiganIf Governor Rick Snyder fails to sign the recently-passed Michigan gambling legislation into law by next week, the whole process will have to start again.

Last week, legislation to regulate online gambling in Michigan was passed by the state´s Senate and House of Representatives on the final day of the 2018 session. Following its passage, the Lawful Internet Gaming Act headed for the desk of Governor Rick Snyder to be signed into law – where it is still waiting to be signed, vetoed, or allowed to lapse.

At the time the Act passed, most industry observers were confident Gov. Snyder would rubber-stamp the legislation. However, if it is not signed before the dawn of the New Year, the bill cannot be carried forward into 2019 and will lapse. With only four days of 2018 remaining, that possibility is increasingly becoming a cause of concern for proponents of regulated online gambling.

Possible Reasons for the Delay

One of the most likely reasons for the delay in rubber stamping the Lawful Internet Gaming Act is that Michigan´s legislature passed more than three hundred bills during December´s thirteen-day lame duck session. Most of these are more important than online gambling for the outgoing Republican Governor because, from January, most of the top political positions in Michigan will be occupied by Democrats.

Therefore, with a lot of paperwork signing to do over the next four days, Governor Snyder may give priority to bills that:

  • Prevents state agencies adopting regulations that are stricter than those enforced by the federal government (Snyder vetoed a similar bill in 2011).
  • Makes it harder for campaigners to get statewide initiates on the ballot paper by requiring voter signatures from at least half the state´s congressional districts.
  • Allows the legislature to intervene in court cases involving state law – an attempt to thwart the incoming Attorney General´s views on non-intervention of certain cases.
  • Overhauls the standards for toxic clean-ups and reduces environmental protection on the wetlands surrounding Michigan´s eleven thousand lakes.

A More Sinister Reason for the Delay

It has been commented that, by passing many of these bills, Snyder and his outgoing Republican colleagues are saying a big thank you to the businesses and businessmen who supported them during their tenure. One businessman in particular contributed $2.5 million to Snyder´s re-election campaign in 2014 and later considered him as a potential presidential nominee in 2016 – Sheldon Adelson.

Snyder has not publically disclosed his views on online gambling; but, if he wanted to say a big thank you to one of his primary donors, there would be no measure more appreciated by Sheldon Adelson than allowing the Lawful Internet Gaming Act to lapse. It may also be in the back of Snyder´s mind that the Adelson-funded Coalition to Stop Internet Gambling is likely to contest the legality of the bill anyway.

The Arguments behind the Legal Challenge

The primary argument behind the legal challenge to Michigan´s Lawful Internet Gaming Act is that it introduces a new form of gambling without statewide voter approval and is, therefore, in violation of the state constitution. Proponents of the bill argue that, as the act of online gambling takes place where the gambling servers are located, the act of gambling is confined to within the state´s existing commercial and tribal casinos, which have a carve-out in Article 4 § 41of Michigan´s constitution.

This is not the only argument the Coalition to Stop Internet Gambling has against the bill. The full list can be seen here – PDF – and, although the issue of sovereign immunity was resolved prior to the passage of the bill, there is still a long list of legal disputes that will have to be decided upon if a legal challenge goes ahead. It also has to be remembered that a judge in New York recently found the state´s regulation of Daily Fantasy Sports unconstitutional – so there is a precedent for legal challenges being successful.

From Governor Snyder´s perspective, letting the bill lapse will allow him to prioritize other paperwork on his desk, gift a present to benefactor Sheldon Adelson, and avoid the scenario of one of his final legislative acts potentially being turned over in the courts. Whether or not he takes the “easy option” remains to be seen – but he only has four days left in which to make up his mind.

UPDATE: Governor Rick Snyder Vetoed the Michigan Online Gambling Bill

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