Michigan Sports Betting Bill Gaining Key Support From Tribal Casinos

A bill to legalize sports betting in Michigan may not have the approval of Gov. Gretchen Whitmer yet, but another key party has lent its support. The various Michigan tribal casinos expressed their confidence this week.

While it’s unclear how quickly those operators may implement legal sports betting into their offerings if the state approves, their support is crucial. With that in hand, the bill’s sponsor is free to focus on other hurdles.

Why support from the Michigan tribal casinos is important

State Rep. Brandt Iden, the sponsor of the Michigan sports betting bill, needs the tribal casinos to push his bill through the Legislature. The state also needs those operators to participate.

The first item is wrapped up. For example, Bryan Newland of the Bay Mills Indian community offered the following:

“We just feel like this is the next step in the evolution of gaming,” said Newland. “I just think it’s important that Michigan as a state, and the tribes included, not miss the boat on this.”

But the situation is murkier in terms of actual buy-in from the casino operators. There are concerns over whether they have the technology to offer sports betting, even on a retail basis.

Iden feels any of the state’s 12 tribal operators could easily catch up, however. The systems to offer brick-and-mortar sports betting are widely available for purchase.

It’s in the best interest of the state if all 12 casinos get on board. Each operator that declines the opportunity means lost potential revenue.

What sports betting could mean for the state treasury

How much the state collects from tribal casinos varies depending on the agreements between each tribe and the state. All of the tribes pay 2% of their aggregate annual revenues to local governments, but some pay more.

Seven of the 12 tribes also pay an additional percentage to the Michigan Strategic Fund. All those payments, representing as much as 12% of tribes’ gaming revenue, totaled over $83.5 million last year.

If all 12 tribes open sportsbooks, that will maximize the amount of tax dollars that city, county and state governments in Michigan can collect. Additionally, new jobs created by sportsbooks mean more income tax dollars.

To entice the tribes to participate, Iden has offered them a discount. The tax rate on their sports betting revenue would be 8.75%. Detroit’s commercial casinos would pay 12%.

Tribal casinos getting a discount is one point on which Iden and Whitmer agree. Whitmer suggested a 15% rate for tribal casinos and an 18.25% tax on Detroit’s facilities.

The support of tribal casinos could also motivate Whitmer. If she is the lone obstacle to the legalization of sports betting, it could be a bad optic.

Why Whitmer also needs the support of tribal casinos

While it’s unlikely the casinos will support Whitmer’s push for higher tax rates, their overall support of Whitmer is an important matter for her administration. Whitmer will be up for reelection in 2022.

If Whitmer sticks to her guns and the Legislature doesn’t acquiesce to her demands, she might veto sports betting bills, as her predecessor did. That could paint her as the main roadblock to sports betting legalization.

If the casinos interpret that as Whitmer denying them the opportunity to grow their businesses and enrich their communities, they might use their resources to support challengers to Whitmer’s governorship. Whitmer could still win another term despite such resistance, but it would represent an unwanted obstacle to overcome.

For now, Iden’s bill has the support of another important stakeholder. It seems likely that support will only improve his chances of getting the bill passed into law.