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Although Gov. Gretchen Whitmer has yet to approve the bill, the Michigan tribal casinos have expressed their confidence in legalizing sports betting in the state.
If the state approves, it remains uncertain how promptly those operators will incorporate legal sports betting into their services. However, their backing is essential. Once that is secured, the bill’s sponsor can divert their attention towards overcoming other obstacles.
Why support from the Michigan tribal casinos is important
The Michigan sports betting bill, backed by State Rep. Brandt Iden, requires the support of tribal casinos in order to successfully pass through the Legislature. Additionally, the state relies on the participation of these operators for the implementation of the bill.
An illustration of this can be seen in the first item, as exemplified by Bryan Newland from the Bay Mills Indian community, who provided the following:
Newland expressed, “In our view, this marks the next phase in the progression of gaming. It is crucial for Michigan, including the tribes, to seize this opportunity and not let it slip away.”
However, there is ambiguity surrounding the level of commitment from the casino operators. There are worries about their capability to provide sports betting services, particularly in physical locations, due to technological limitations.
However, Iden believes that any of the state’s 12 tribal operators could quickly catch up as the systems required for offering physical sports betting are readily available for purchase.
The state’s best interest lies in having all 12 casinos onboard, as every operator that rejects the opportunity results in potential revenue loss.
What sports betting could mean for the state treasury
The amount collected by the state from tribal casinos differs based on the specific agreements made between each tribe and the state. While all tribes contribute 2% of their combined annual revenues to local governments, certain tribes may choose to pay additional sums.
Last year, a total of over $83.5 million was paid by seven out of the 12 tribes as an additional percentage to the Michigan Strategic Fund. These payments accounted for up to 12% of the tribes’ gaming revenue.
By allowing all 12 tribes to establish sportsbooks, the government of Michigan can optimize tax revenue collection at the city, county, and state levels. Furthermore, the introduction of sportsbooks will generate new employment opportunities, leading to increased income tax contributions.
In order to incentivize the tribes’ participation, Iden has extended a discount to them. The tax rate imposed on their sports betting revenue would be 8.75%, while Detroit’s commercial casinos would be required to pay 12%.
Both Iden and Whitmer find common ground in offering a reduced rate for tribal casinos. Whitmer proposes a 15% rate for tribal casinos, while suggesting an 18.25% tax for Detroit’s facilities.
Whitmer may also be influenced by the backing of tribal casinos. If she remains the only barrier to the legalization of sports betting, it could create a negative perception.
Why Whitmer also needs the support of tribal casinos
Although the casinos are unlikely to endorse Whitmer’s proposal for increased tax rates, their overall backing remains significant for her administration as Whitmer is facing reelection in 2022.
If Whitmer remains firm in her stance and the Legislature does not comply with her requests, she could potentially veto sports betting bills, similar to what her predecessor did. This action may portray her as the primary obstacle to the legalization of sports betting.
Should the casinos perceive Whitmer’s actions as a rejection of their ability to expand their businesses and benefit their communities, they might allocate their resources towards backing opponents to Whitmer’s governorship. Although Whitmer could still secure another term despite facing such opposition, it would pose an unwelcome hurdle to overcome.
Currently, another crucial stakeholder is backing Iden’s bill, which suggests that his chances of successfully passing the bill into law are likely to increase.
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