Politics slowing Michigan sports betting bill

Oct 16, 2019 3:00 AM

Brandt Iden enjoys making the occasional sports bets. The Michigan state representative would enjoy making them more if he could do so within his state’s borders.

Iden has been the point person for getting sports betting legal in the Great Lakes State for nearly four years, doggedly pursuing policy and crafting bills to reach that end. His current iteration — one that separates I-Gaming and sports betting for flexibility purposes — is his ninth version of the Lawful Sports Betting Act.

“From an I-Gaming policy perspective, we could essentially cover everything rolled into one fromn a policy standpoint,” explained Iden, a Republican who represents a district that includes Kalamazoo and extends south near the Michigan-Indiana border. “The new iteration has no tie bar to run the two bills separately. The entire gaming package is a large bill with bipartisan support with both Democrat sponsors and Republican sponsors. (Passing it) solely resists with this administration.”

The administration Iden is referring to is Democrat Governor Gretchen Whitmer, who took office in January after defeating Bill Schuette. Whitmer and Iden have yet to find common ground in two important areas. One is the tax rate on both sports betting and I-Gaming, and the other being the governor’s concern that sports betting will take away from the state’s School Aid Fund.

The sports betting portion of Iden’s bill calls for an eight percent tax on winnings, while Whitmer countered with a 15 percent excise. With the city of Detroit also having a 3.25 percent tax on top of the final state number, Iden has been cognizant of landing at a final number that creates an opportunity for the state’s casinos — and the three in Detroit -- to find a profit margin.

“Eight percent is what I still believe makes great bill. That 3.25 percent tax in Detroit, at 11.25 I believe is still competitive,” Iden said. “It’s consumer friendly and profitable with very small margins. The Governor wants 40 percent for I-Gaming and 15 percent on sports, plus the effective 3.25 in Detroit.

“I’m willing to come off eight percent and find a middle ground. The bill is on eight, but I’m open to a reasonable number to plug in the bill, that is where the bulk of discussion is.”

The School Aid Fund is the main source of the impasse. Whitmer’s office released a statement to WXYZ-TV last week noting “the fiscal implication with this legislation is concerning” and it “continues to have revenue concerns regarding the bill’s impacts on the School Aid Fund” in the sense sports betting could draw from potential lottery revenue that goes into the fund.

Iden, though, feels the governor’s stance regarding the School Aid Fund is based on “an unfounded belief” it will affect the lottery, noting sports betting has not negatively impacted revenue in that manner in other states where sports betting is legal.

Iden himself enjoys sports betting and already has made three trips to Indiana for sports wagering. He sees Michigan with the potential to move ahead but also knows the clock is running for both him — Iden is bound by term limits and cannot run for re-election in 2020 — and the state as both Ohio and Canada are in discussions to move forward in sports betting as well.

“We’re in a situation where we could lose customers,” Iden said. “Detroit will lose customers to Ohio and go over the border (to Canada). People like me, it’s a 45-minute drive to Indiana. We will lose that revenue if we don’t act fast.”

Michigan passed a state budget, which gives Iden and the governor runway to narrow the gaps on their differences in the additional state legislative days. If a bill is passed in those sessions, a potential timeline would exist to accept bets for the Super Bowl and the NCAA Tournament.

With the MGM Casino in Detroit recently unveiling its Moneyline Sports Lounge that incorporated sports betting windows into its design plan, time is of the essence.

“Gaming control is a matter of when, it’s a matter of timing. The market sees that and wants to be the first to capitalize,” the state rep said. “There are many stakeholders and that has helped me from a consumer protection standpoint.

“I am a consumer, I have a passion for this industry. I will get this done … it’s just a matter of when.”

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