Today was the day by which Michigan Rep. Brandt Iden expected to get his online gambling and sports betting bill approved by the state’s House of Representatives.
Two weeks ago, Iden told Online Poker Report that he believed a vote was imminent in Michigan. After changes he made to H 4926 — you can see the draft here — in an effort to end opposition from the state’s tribal gaming interests, he thought there was support in the House to move the bill.
This turned out not to be the case. It’s rarely that easy when it comes to internet gambling legislation.
“I got it on the agenda and got the opportunity to bring it up to colleagues, and a lot of questions came out of it,” Iden said. “If they didn’t sit through the committee process and haven’t dealt with this issue, it can be complicated. So I’m working through the members’ questions.”
Following the setback, Iden altered his goal to getting the bill through the House before the legislature breaks for the summer on June 21.
Iden noted that the main issues he heard from members related to tribal considerations and whether or not the bill would be an expansion of gambling, requiring a constitutional amendment.
Representatives with tribal casinos in their districts likely are only going to support the bill with the approval of their key constituent. It’s always difficult to juggle tribal sovereignty and the need to create a level playing field between tribal and commercial gaming interests.
Iden’s new draft provides details for how tribes would submit a letter to the governor requesting their compact be renegotiated to include internet gambling, and what such compacts would include.
“I believe that adding internet gaming as a platform for the tribes has to be renegotiated through their compact,” Iden said. “I think the best way to do it is to ensure the state negotiates with each tribe independently, making sure we address their specific issues.”
The tribes in Michigan haven’t taken a hard line against online gambling at any point in this process, but the steps laid out in the new draft weren’t enough to get their support, or even their passive non-opposition.
“A lot of the members have tribal gaming establishments in their districts, and I know they have been in conversations with their tribes about the bill,” Iden said. “I wouldn’t say we’re at a point of total neutrality with them yet, but I continue to work with the tribes so they feel comfortable that, as the legislative process continues, their interests are being advocated.”
House colleagues asked Iden to explain why online gambling isn’t an expansion of gaming that would require a constitutional amendment by public vote. One such member that is unconvinced on constitutionality is Republican House Speaker Tom Leonard, who sets the legislative agenda.
Leonard is a former assistant prosecutor under Michigan attorney general Bill Schuette, who was one of ten state AGs to sign a letter addressed to Vice President Mike Pence in December of 2016 asking for a rollback of the 2011 Department of Justice Office of League Counsel opinion that the 1961 Wire Act applied only to sports betting and not to other forms of online gambling.
“One of the things I’m trying to address is that the legislation is constitutional, that it merely regulates what is going on in the black market currently,” Iden said. “Once I get them comfortable with that, the Speaker included, I think things will certainly be easier.”
Iden, who is also a Republican, did add that Leonard hasn’t been standing in the way of the bill. “I appreciate that the Speaker has given me latitude to continue to have fruitful conversations with legislators on this issue,” he said.
Iden asserted that he thinks opponents of online gambling – namely the Sheldon Adelson-backed Coalition to Stop Internet Gambling – are trying to use the constitutional argument to derail the legislation, and that he expects they will attempt to bring the law to court if the bill passes.
“I believe the bill we pass and the governor signs will be a bill that’s fully constitutional and would withstand a court challenge,” Iden said.
Iden indicated that the biggest change in the new draft is lowering the tax rate to eight percent, as opposed to the 15 percent he had in the bill originally.
“We worked with both tribal and commercial casino partners to make sure the tax rate is acceptable to everyone,” Iden said. “It’s a big component of the new draft and one of the big pieces we had to work through.”
The bill introduced by Sen. Mike Kowall calls for a 10 percent tax on gross gaming revenues. Another draft bill from Senate Majority Leader Arian Meekhof sets the rate at 15 percent. Iden noted he was in touch with Kowall and that the senator supported the policy changes he is making to the bill.
Even if Iden’s online gambling bill had been passed by the House today as he hoped, it probably wouldn’t have been voted on in the Senate before the lame-duck session at the end of the year.
The legislature returns from summer break on Sept. 5, at which time they’ll be eyeing November elections.
All seats in the House, including Iden’s, are up for election every two years, complicating a matter that can be sensitive for politicians to support in an election year.
“I don’t want anyone to feel rush or pressured,” Iden said. “I want to make sure they have all the info they need and are comfortable with the constitutionality of it going forward. The goal is still to get this on the governor’s desk this year.”