Michigan lawmakers, stakeholders ready to expand gambling?

Will Michigan Online Poker Be All Wrapped Up For Christmas?

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Poker players in Michigan might be getting a stocking full of good news this holiday season. State Sen. Curtis Hertel, a key proponent of this year’s gambling legislation, says he intends to put an online poker bill on the governor’s desk before winter break.

The expedited timeline was first reported by Matthew Kredell of Legal Sports Report after a Thursday conversation with the senator. According to Hertel, stakeholders have largely come together on the Lawful Internet Gaming Act ahead of next week’s committee hearing in the upper chamber.

Passage of HB 4311 and HB 4916 would facilitate a broad expansion of gambling in Michigan, including online poker, online casinos, and omnichannel sports betting. Previous versions of both bills cleared the legislature around this time last year before running into a veto from former Gov. Rick Snyder.

Snyder’s successor, Gov. Gretchen Whitmer, has notably echoed some of the same concerns about this year’s effort.

Here comes Michigan online poker?

Poker is, fortunately, the least controversial component of the proposed package.

While the governor has squawked about the taxes and fees on sports betting and the inclusion of online slots, provisions for online poker have remained mostly undiscussed and unchanged. The bill, in fact, only mentions the word “poker” three times across its 33 pages.

In its current posture, HB 4311 allows each casino licensee — both tribal and commercial — to offer online poker under a single brand apiece. The same goes for the online casino implementation, though operators may provide the two categories under separate branding.

Poker operators without a land-based presence, like PokerStars, would need to partner with a licensee in order to spread their games in Michigan.

Casinos would pay state tax on a sliding scale, ranging from 8-23% of revenue at maturity. For the three casinos located in Detroit, those numbers increase by 3.25% across the board. Licenses would cost $100,000 a piece, plus $50,000 to apply and renew annually.

Hertel running with the baton

The House passed this package of bills in October, but it did not come easily. A summertime rift between the governor and Rep. Brandt Iden seemed, for a time, to make another veto all but inevitable.

In a series of interviews with OPR this fall, the House sponsor scathed the administration for its unwillingness to come to the table to negotiate, or even take his calls.

Iden did push an amended package through the House, though, so he’ll now rely on his Senate champion to ease the friction with the Whitmer administration. Unlike the persistent Iden, Hertel does have a party affiliation with the Democratic governor.

Read more on the passing of the baton here.

Hertel told LSR that he expects the Regulatory Reform Committee to vote the bills out next week. Passage thereafter by the full Senate would send the package back to the House to concur with any changes (if needed), then onward to Whitmer’s desk.

It’s up to you, new governor

Although Hertel has friends in high places in Michigan, the administration has yet to support the proposal publicly.

Like her predecessor, Gov. Whitmer maintains reservations that expanded gambling will cannibalize online lottery sales. Michigan is one of six states that sells tickets over the internet, allocating revenue from MI online lottery tickets to the School Aid Fund.

The worry is that online gambling might ultimately reduce the total funding for education in the state.

Those concerns are mostly unfounded, but Iden adjusted his proposals in an effort to garner gubernatorial support. We’ll have to wait until the committee hearing to see what the working language looks like now, but the latest version included significant concessions on the tax rates.

Still, full passage remains anything but a safe bet.

Although the bills cleared the House with relative ease, they did not do so by veto-proof margins. And despite sponsor concessions, the structure of taxes and fees still falls far short of recommendations from the state Treasury. Per that report, the governor was hoping for a tax rate of 40% and license fees closer to $1 million. So, we’ll see.

Should Hertel’s timeline materialize, we’ll at least get the chance to find out whether Whitmer plays the role of gambling gift-giver or grinch this holiday season.

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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