Tribes are still not on board with latest version of online gambling in Michigan

Gaining Support Of Detroit Casinos ‘Big Step’ For Michigan Online Gambling Bill, Lawmaker Says

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Michigan state Rep. Brandt Iden hoped to get his online gambling bill through the House before the turkeys were stuffed on Thanksgiving. Instead, he settled for putting the bill on the House floor before Santa stuffs himself down the chimney.

After getting H 4926 through his Regulatory Reform Committee on Wednesday, only three months after introducing the bill, Iden spoke to Online Poker Report and expressed optimism that the House will pass the bill in the first quarter of 2018.

“We were a little behind my goal, but we’re moving the ball forward into the first quarter of next year,” Iden said. “I’m looking to continue discussions with stakeholders throughout January and early February, and have some action shortly thereafter.”

Tribes still in opposition

An amended bill garnered new support from Michigan’s three commercial casinos located in Detroit, but not from any of the 12 Indian tribes that operate 23 gaming facilities throughout the state.

Iden indicated that the main point of objection among tribes was his removal from the bill of Sec. 16 at the request of the commercial casinos. This section, put in the original bill to accommodate the tribes, essentially proposed that if a change in federal law prohibited tribes from participating in online gambling, then the Detroit casinos wouldn’t be able to continue offering it without the tribes.

“I removed that section from the new draft of the bill, and that brought out strong opposition from the tribes,” Iden said. “My response is that tribes are sovereign nations that operate independent of legislative purview. The three major casinos in the City of Detroit are the only ones I have control over, which report to gaming control.

“If we pass this legislation to allow internet gaming, casinos start purchasing servers and making the capital investment to get up and running, and then a year or two later the Department of Justice says that tribes aren’t allowed to provide internet gaming for some reason, that has no bearing on the casinos and I agree that to subject them to a federal challenge wouldn’t work.”

A bridge too far for tribes?

Iden explained that this change created an unbridgeable gap with the tribes, so he gave up on his hope to have all stakeholders on board before moving the bill and pushed it through the committee.

“I recognize the tribes’ desire for more equity here but, given the disparity between the two, I’m not sure what I can do,” Iden said. “After six months of conversations and negotiations, I thought I had the bill in the best place I could get it and I was committed to show action. But I made clear on record today in the committee that I will continue working with the tribes on other language they’d be interested in having to get them as close to supporting the bill as we can.”

Iden did note that he doesn’t think there is any language in the bill as it sits that tribes want to have removed, only areas where they would like language added.

Change in tax rate makes a difference

Lowering the MI online casino tax rate from 15 to 10 percent, bringing the House bill in line with the Senate bill introduced by Sen. Mike Kowall, was another big reason the bill received casino support, according to Iden.

“I think that was a big give on the state’s part, and it’s certainly one of the lowest rates if you look at other states and where they’re at,” Iden said.

A new section also provides specifics for how the state’s gaming revenue will be spent, making sure that a lot of the revenue goes back to the City of Detroit.

An additional $1 million has been earmarked for addiction services for problem gamblers, which Iden believes gained votes from Democrats on the committee.

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Can the bill pass without tribal support?

Iden contends that he thinks the bill can pass as currently written, though he will continue to discuss adjustments with stakeholders. The bill passed through the committee by a comfortable 12-3 margin.

“I believe at this point in time the committee is a good makeup of the body,” Iden said. “Getting support from the three major casinos in the state of Michigan is a big step in the right direction for this legislation. When there was a hearing on the Senate bill, they were neutral.”

He indicated that the casinos also want to continue discussing how the tax dollars are spent, as well as to make sure their tax rates are equal to what tribes would be paying should their compacts be renegotiated with the governor to include iGaming.

He’s not expecting to get unanimous support from the tribes, and he thinks a bill could pass without tribal support.

“I believe we can, though that’s not my intent,” Iden said. “What’s going to be acceptable to some tribes isn’t going to be acceptable to all. I’m willing to work to get common-ground language with as many as I can, and others will continue to be in opposition. You can’t always get every stakeholder’s support.”

- Matthew began writing about legislative efforts to regulate online poker in 2007 after UIGEA interfered with his hobby of playing small-stakes online poker while working as a sportswriter at the Los Angeles Daily News. Covering the topic for Bluff Magazine, PokerNews and now Online Poker Report, he has interviewed four U.S. Congressmen and 40+ state legislators. His poker writing has been cited by The Atlantic, and Matt also has written on a variety of topics for Playboy Magazine, Men's Journal, Los Angeles magazine, LA Weekly and
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