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Michigan Sports Betting Hits Another Delay

The state of Michigan just wants to put sports betting out there legally – and the people want it. However, a few details still need to be ironed out first, including how to make things work before the Oct. 1 budget deadline.

“We’re in the process of working on our budget, and I had been working diligently to try to include iGaming, sports betting and everything that I’ve been working on (in the budget), but because of some other things I wasn’t successful,” said Michigan Representative Brandt Iden.

“Hopefully, we’ll revisit everything in October.”

Even with the delay, Iden believes that sports betting will pass through the state legislature by the end of the year. Earlier this week, the bill was sent to the Ways and Means Committee, where it’ll wait until the budget is sorted out.

Iden does have a sense of optimism this time around with the bill.

Last year, he had a package of gaming bills that got all the way to the Governor’s desk before getting vetoed right before New Year’s Eve weekend. Iden does have the legislative support, and also from powerful tribal gaming stakeholders in the state. All that’s left to do is get the approval of Governor Gretchen Whitmer and have her sign it.

It’s About The Numbers

The biggest hurdle at this time is taxes. Iden’s current bill calls for an eight percent tax rate of licensees’ sports betting gross revenue – he claims that Whitmer is asking for 15 percent. With the iGaming aspect, Whitmer is also looking for a sizeable 40 percent tax rate, which would be the second-highest in the United States.

Iden is willing to negotiate on both rates, but it’s clear that he feels like the 15 percent Whitmer is asking for is too high. Potential sportsbook operators have advised the tax rates be 10 percent or less, given the smaller margins in sports betting.

“I am adamant that we have to keep it at 10 or below,” Iden said. “I’ve seen those studies and understand what works and what doesn’t.”

If Michigan can figure out all of these tax issues, there’s a chance that legalized sports betting could be available in the state by March Madness. Or, as Iden has previously wished, just in time for the Super Bowl.

Back in 2018, it looked like Michigan would be one of the first states to have legalized sports betting. However, with politics and negotiating the state’s tribal interests, they have fallen behind their Midwest neighbors. In 2019, Illinois, Indiana and Iowa have all gotten themselves immersed in the game – Indiana and Iowa are even adding mobile sports betting to their arsenal.

“With Illinois and Indiana (legalizing), and Ohio trying to get it together, Michigan will be left behind in the Midwest, so that makes it incumbent upon us to move forward,” Iden said. “We’ve got a really good bill; we’ve been working on it for over three years.”

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