Michigan Inches Closer To Gambling Expansion, But Hurdles Remain

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Although Tuesday, Oct. 29, marked a significant milestone in the progress of a Michigan sports betting bill and iGaming bill becoming law, there remains a major obstacle to overcome: the possibility of a gubernatorial veto.

Despite the widespread support from various stakeholders, HB 4916 and HB 4323 still await the crucial approval of a key figure. If the governor continues to withhold support, it could potentially derail the entire agreement, even if it manages to progress further.

The good news for the Michigan sports betting bill

Republican Rep. Brandt Iden successfully advanced both bills through their committee on Tuesday, receiving support not only from fellow committee members but also from other interested parties.

The bill has received support from potential mobile sportsbook operators such as DraftKings, as well as retail casinos. This sentiment is also echoed by tribal casinos and professional sports leagues.

The House approved a revised version of HB 4916 on Wednesday, which included certain compromises. Notably, the tax rate has been increased to 12%, and a new provision has been added concerning the utilization of “official” data.

The bill mandates that Michigan legal sportsbooks must utilize “official” data if it is available on terms that are deemed “commercially reasonable.” However, the bill does not specify the precise definition of these terms.

Alongside the sports betting aspect, these bills also encompass another intriguing component. Iden perceives it as a bundled bill, alongside HB 4323, which likewise received approval from the House on Wednesday.

The proposed legislation aims to legalize iGaming, which encompasses online poker, slots, and casino-style table games. In the event that this bill does not succeed in passing, the sports betting bill has the potential to be enacted as a standalone law.

The Michigan Senate has not yet scheduled votes on both bills. Additionally, there is a possibility that a governmental force from the opposing party may impede that part of the process.

The biggest obstacle to legalization may still remain

Governor Gretchen Whitmer, a Democrat, has expressed her opposition to Iden’s legislation due to its tax structure. Despite the recent increase, the current rate falls significantly below the 18.25% rate that Whitmer previously supported.

Whitmer’s absence from the bill drafting process so far indicates a possible use of her veto powers. It is worth noting that under Michigan’s constitution, she has the option to exercise a line-item veto.

Although the governor’s potential veto may not appear as an immediate worry, it could soon become a source of dispute. Iden is certain about having sufficient support for the bill in the Senate.

If the voting process is swift and Iden accurately gauges his level of backing, the bill could reach Whitmer’s desk in a relatively short time. Consequently, the bill’s ultimate approval will heavily depend on Whitmer’s backing.

There is a possibility that Whitmer may become involved prior to the bill reaching her desk, which could be what Iden anticipates by pushing the bill forward. Nevertheless, it remains a risky situation.

Should the bill not be signed by Whitmer, it would have negative consequences for the iGaming bill and would also result in Iden having to wait until the next legislative term for another attempt. The situation is progressing and it won’t be long before we witness the outcome.

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