Michigan Inches Closer To Gambling Expansion, But Hurdles Remain

While Tuesday, Oct. 29, represented a significant step toward enacting a legal Michigan sports betting bill and iGaming bill, the elephant is still in the room. That elephant is a potential gubernatorial veto.

Although HB 4916 and HB 4323 seem to have broad support from many stakeholders, they have yet to be signed off on by one of the most important people. The governor’s continued lack of support could nix the entire deal, should it get that far.

The good news for the Michigan sports betting bill

On Tuesday, Republican Rep. Brandt Iden was able to push both bills through their committee. The support came not just from fellow members of the committee but from other interested parties as well.

Potential mobile sportsbook operators like DraftKings along with retail casinos have expressed support for the bill. Tribal casinos and professional sports leagues echo that sentiment.

In the version of HB 4916 that was approved by the House Wednesday, there were some concessions. The tax rate rose to 12%, and there’s a new requirement regarding the use of  “official” data.

That includes a mandate for Michigan legal sportsbooks to use “official” data if offered on “commercially reasonable terms.” There’s no language in the bill to define exactly what those terms are.

In addition to the sports betting facet, there’s another interesting segment included in these bills. Iden considers it a package bill with HB 4323, which was also approved by the House on Wednesday.

That bill would legalize iGaming, an industry term for online poker, slots and casino-style table games. Even if that bill fails to pass, the sports betting bill could still become law on its own.

Votes on both bills have yet to be scheduled in the Michigan Senate. It’s also possible that another governmental force from the other side of the aisle may hold up that part of the process.

The biggest obstacle to legalization may still remain

Democratic Gov. Gretchen Whitmer has opposed Iden’s legislation because of its tax structure. Even with the recent increase, it’s still far short of the 18.25% Whitmer endorsed earlier.

Whitmer has been absent from the process of drafting this bill thus far, which further suggests she may use her veto powers. Michigan’s constitution allows her to use a line-item veto, so that’s an option for her as well.

While the governor’s potential veto may not seem to be an immediate concern, it could be a point of contention very soon. Iden is confident he has support for the bill in the Senate.

If the votes happen quickly and Iden is right about his level of support, the bill could land on Whitmer’s desk sooner rather than later. At that point, the bill’s successful passage will rest squarely on Whitmer’s support.

It’s possible that Whitmer could get involved before the bill reaches her desk, and that might be what Iden is hoping for in pushing the bill forward. Either way, it’s a risk.

If the bill dies at Whitmer’s desk, that would bode ill for the iGaming bill and would also mean Iden would likely have to wait until the next legislative term to try again. The chess pieces are moving and it’s only a matter of time before we see how it plays out.