Governor Gretchen Whitmer and the legislature of the state of Michigan are marching closer to online gambling and sports betting regulation. The final votes for the same will take place this week, making the state eligible for sports betting practices.
Michigan’s gambling offers
Michigan has a long history of gambling. The state has three commercial casinos in Detroit alone alongside 24 tribal casinos dotted throughout its length and breadth. The state Lottery also provides a host of gambling products. The new law will create a new and regulated online gambling and sports betting market in the state. Given its historical association with gambling, Michigan could be one of the biggest gambling markets in the US.
The legislature has to decide on a set of new bills that seek to legalize gambling and sports wagering in the state. Gov. Whitmer isn’t considered to be a supporter of gambling options in the state. She believes that adding new options to the already existing gambling framework would lead to the “substitution effect.” As a result, people who play the Lottery will switch to internet games. This will lead to a loss of revenue for the state lottery that sponsors public programs.
Could the substitution effect be true?
At present, Michigan schools get $700 out of every $1,000 in net wins. The new bill suggests a 19% tax on online casinos and poker tables. Less than 50% of the proceeds will go to schools in Michigan. This could mean that schools will get only $81 for every $1,000 in net wins. The Republican-led legislature and its Democratic Governor are now working to find a regulatory sweet spot that legalizes gambling but doesn’t impact the Lottery revenues significantly.
According to Sen. Curtis Herel, the lawmakers have made sizeable progress in the matter and are trying to strike an agreement with the Governor. Interestingly, the House passed the gambling and sports betting bill in October this year. The Senate officials reportedly worked over the weekend to review the changes made by the House. A vote on the changes is scheduled for Tuesday, right before the lawmakers take their holiday break.
Republican Rep. Brandt Iden emphasized on the need for creating a competitive market. He also urged the lawmakers to decide on the bill quickly as the state is losing money because of constant delays. Gov. Whitmer is proposing a 10%, 11%, and 12% rate of tax on different gambling operations but the House wants a lower rate. The issue could be a top priority for lawmakers.