One might say that the movement of online gaming legislation in Michigan this year is slow, but it would be more accurate to say its being handled with care and calculation.
The burn of last year is still felt by many in the gambling community, especially Michigan Representative Brandt Iden. He championed the online gaming bill and pushed hard for its passage through both houses of the legislature at the end of 2018, and it was a sweet victory…until it wasn’t. When then-Governor Rick Snyder vetoed it on December 28, it burned.
So, when Iden partnered with State Senator Curtis Hertel Jr. in 2019 to push a new internet wagering bill, they made sure to plan and evaluate every move beforehand.
Success So Far
Iden and Hertel worked to introduce companion bills in the House and Senate in 2019. And on March 7, they revealed the 2019 Lawful Internet Gaming Act, which took form as SB.186 in the Senate and HB.4311 in the House.
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The bills set out the basics for internet gaming, such as an initial $200,000 cost for an operator to obtain a license and then a $100,000 cost to renew annually. The gross gaming revenue for operators will be set at only 8%, relatively low as compared to other states. And the bills call for the creation of a Division of Internet Gaming to oversee the new industry.
Days after the bills’ introductions, a hearing in the House Regulatory Reform Committee showed a great deal of support for HB.4311 from land-based casino representatives and lawmakers alike. And when the bill was put up for a committee vote the following week, it passed by a 13-to-1 vote.
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The bill then went to the House Ways and Means Committee, of which Iden is the chairperson.
Since then, however, the bill hasn’t moved. And that has been causing some concern.
Hertel and Iden Express Confidence
Both bill sponsors spoke to Online Poker Report recently. Iden noted that Hertel’s father was a member of the state legislature in Michigan and helped legalize casinos for Detroit. And Hertel was key in passing the 2018 internet gaming bill.
The bipartisan nature of the support for online gaming is not only important for passing the bills through the legislature but also securing the governor’s support. Iden is a Republican, and Hertel is a Democrat. The Republicans control the entire legislature, but Governor Whitmer is a Democrat.
Despite the partisan division that stops progress for many issues, gambling tends to cross those party lines, especially when the sponsors work from both parties. And OPR pointed out that Whitmer and Hertel have a bond, as Whitmer worked for Hertel’s father in the legislature. Hertel Jr. noted, “We’ve had a long-standing relationship, and I feel pretty good about where she will come down on this issue. I’ve talked to her public policy people and haven’t gotten any concerns.”
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Further, Hertel told OPR that he expects the 2019 Lawful Internet Gaming Act to pass this year. There are no timing restrictions as in some other states, as the legislature in Michigan meets throughout the year. “I would be very surprised if it didn’t get passed by both chambers this year,” Hertel said. “I would be shocked. The legislation is not that different than what passed last year, and it’s not overly partisan.”
Why the Delay?
On the surface and at the state level, there is no reason for a delay in calling for a vote in the House Ways and Means Committee to push the bill toward the House floor for a vote.
On the federal level, however, there is a reason. That is the most recent opinion on the Wire Act that was made public in January 2019 and written by the Office of Legal Counsel at the US Department of Justice. The controversial opinion reversed the 2011 decision that held the Wire Act only pertinent to sports betting, not to online lotteries, poker, or casino games.
It didn’t take long for states to express concern about that opinion with regard to their online gaming businesses. The New Hampshire Lottery Commission took the lead on the issue, on behalf of its substantial revenue that comes from online lottery ticket sales, and the public organizations that benefit from that revenue. The NHLC and its service provider, NeoPollard, are currently involved in a civil suit against the DOJ and US Attorney General William Barr, which is currently under consideration in the US District Court for the District of New Hampshire.
Many states filed amicus briefs in support of the plaintiffs in the case, including the Michigan Bureau of State Lottery. The purpose of the Michigan Lottery’s participation in the case is to represent the impact that the DOJ opinion could have on 47 jurisdictions around the country. And Michigan’s amicus brief was filed in representation of 12 other state lottery groups in addition to its own.
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Since the general belief is that the Wire Act case will be decided by the end of May, it could be a calculated decision by Iden and Hertel to hold off on any bill push for internet gaming until the results of the case are clearer.
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