Michigan Governor Whitmer Refusing to Negotiate in Online Gaming Standoff

Posted on: July 24, 2019, 02:33h. 

Last updated on: July 24, 2019, 02:40h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

The Michigan lawmaker behind the push to bring online gaming to the state has accused Democratic Governor Gretchen Whitmer’s administration of “not listening to the experts” and of ignoring his efforts to compromise on a bill passed by the House in June.

The bill’s main sponsor, State Representative Brandt Iden (R-Oshtemo Township), told Online Poker Report this week that Whitmer was refusing to deal with him directly.

Whitmer has made her feelings clear about online gaming. She believes that it will cannibalize the state’s lottery revenues, siphoning off much-needed money from school programs. It’s a theory that hasn’t been borne out in new Jersey where both online gaming and lottery revenues are going from strength to strength.

In May, representatives from the governor’s office said Whitmer would not sign the bill as it stands. In June, the Treasury proposed removing online slots from the legislation because they were too close to some of the products the Michigan lottery offered, as well as bumping the 9.25 percent tax on gross gaming revenue to 40 percent.

Communication Breakdown

Iden said at the time that this was “not a meaningful proposal” and that eliminating slots would cut potential revenues from a future industry by 70 percent. Meanwhile, a 40 percent tax rate would make the market undesirable for potential operators.

“When you propose something like a 40 percent tax rate, it just clearly shows that you have no knowledge of what’s happening in the industry,” Iden told OPR.

One of the things I continue to ask is for the administration to better educate themselves on the issue,” he added. “The fact that the governor’s office is ignoring the experts and simply listening to Treasury, who is not an expert in this issue and has very little knowledge, is problematic.”

Iden said he would be prepared to budge on the tax rate, at least to double figures, and would possibly be prepared to swallow the no slots rule – possibly – but, according to Iden, the communication channels with the governor have closed.

Since Michigan is one of the few states with a yearlong legislative calendar, there is theoretically plenty of time to change Whitmer’s mind, but not without meaningful dialogue.

2018 Bill Vetoed

It’s a frustrating situation for Iden, who last year came about as close as it’s possible to come to legalizing online gaming in Michigan without actually doing it.

Just days before Christmas, former governor Rick Snyder unexpectedly vetoed Iden’s bill after the lawmaker had united the state’s disparate stakeholders and legislature behind it.

But he’s particularly frustrated with the Whitmer administration and the Treasury for refusing to look at New Jersey, whose lottery operations earn slightly more per capita than Michigan’s, despite having no online component, while its maturing online gaming market continues to grow and has contributed $217,005,959 in taxes to state government since its 2013 inception.