It was only a matter of time before the state of Michigan saw its first legal sports betting bill in the statehouse, and that time has finally come. The issue is a popular one in the state, with full support of the House and Senate—not to mention the voters. Rep. Brandt Iden intends to introduce within the next few weeks. Preparing the bill took a little longer than expected and, considering some of the other legal sports betting bills being proposed by Michigan’s neighbors as of late, every gambler will be glad they took their time.
As one can imagine, there are many interested parties when it comes to sports betting, and they all want their place at the table. Many states have been getting bogged down in the details as of late and getting away from the main purpose of legalizing sports betting: to capture the black market and offer consumer protections. Michigan’s early draft shows signs of fulfilling that original intent, and it is a relief to see.
Those Important Details
This new Michigan sports betting legislation would authorize both mobile and land-based sports wagering at all of the state’s 23 tribal and three commercial casinos. In order to implement any of this, they are going to have to establish a Division of Sports Betting as well as a Michigan Sports Betting Fund and this bill will do both of those things. This bill also makes sure there are no limits on which wagers are allowed to be offered. Single-game bets, teaser bets, parlays, over-under, moneyline, pools, exchange betting, in-game betting, in-play bets, proposition bets, and straight bets will all be allowed and left to the operators, whether it is professional sports or collegiate.
Michigan will impose a fee of $200,000 for an initial license, which will be renewable for $100,000 annually and $50,000 annually for suppliers. The state will also tax sports betting revenue at a rate of 8%, again, this is much more reasonable than other states such as Indiana or Illinois. This is usually a main sticking point in other states, and Rep. Iden did note he anticipates some changes and alterations to be in the final language of the bill between now and the introduction.
Another tough spot for other states has been over official league data and integrity fees. For wagers on the outcomes of games, the bill would permit licensees to use any data supplier they choose, as long as that data does not originate from either live event attendees in violation of terms of admittance or automated computer programs that compile data from the internet in violation of terms of service. This is fine, and most states agree. However, with in-play wagers, Michigan does make a few concessions to the lobbyists working on behalf of the professional sports leagues.
For in-play wagers, however, the bill would require operators to use official league data upon request from the sport’s governing body. It’s this type of mandate many stakeholders don’t want because it really has no merit. Nevada has been handling huge amounts of sports betting action for decades and was never forced to do such a thing. Many feel this is a way for the professional sports league to get the money they failed to collect on from integrity fees. Michigan won’t have those either, but the mandate for league data on in-play wagers looks to be here to stay.
Revenue
Another wise move the state has made with this draft is that the bill goes into great, specific detail on just how the state will be using the Michigan sports betting revenue generated by this legislation. There have been many holdups in other states as the specifics on how the revenue was to be shared and used were often omitted from the proposals. As you can imagine, this causes problems, and it is nice to see Michigan get right to the point with its legal sports betting revenue sharing.
55% of the revenue produced with be delivered to the State Sports Betting Fund, which will pay $1 million annually into a Compulsive Gaming Prevention Fund. Then, 30% will go to the city in which a sports betting licensee’s casino is located for local development and infrastructure. 5% of the revenue will also go to the Michigan Transportation Fund, with another 5% to the Michigan Agriculture Equine Industry Development Fund.
A Path Forward
Rep. Iden is also the sponsor of a Michigan online gambling bill which was introduced back in March. Since then, it has been delayed in the House Ways and Means Committee. While Iden does chair this committee, the hold up is due to concerns expressed by the Governor’s Office. Online sports betting is always a touchy subject and, once again, Michigan is taking the correct approach here. Iron out the details first, then move forward. Other states would be wise to take note.
