In a decision that has shocked many gaming industry experts, outgoing Michigan Governor Rick Snyder on Friday, December 28, 2018, vetoed the online gambling bill that was the brainchild of Rep. Brandt Iden. The main reason why this move was surprising was because the bill had been approved by the Michigan legislature a few days before Christmas – this was expected to be the biggest hurdle in the way of the bill but once it was passed by the legislature, everything seemed to be all set for online gaming in the state.
Big Blow to the Online Poker Industry
As it stands, only three states currently have legal poker industries – that is Nevada, Delaware and New Jersey. Pennsylvania is next in line after it passed an expanded gambling bill a year ago. For a brief moment, it appeared that Michigan would also go down the same path. However, Governor Snyder, who is just finishing up his second term had other plans – out of the 400 bills that he received a week before he left office, he opted to veto forty of them including the bipartisan online gambling measure.
Why the Veto?
In a letter addressed to the House and Senate, the outgoing governor pointed out that the state’s government does not have “have the data to support this change at this time.” Snyder further said that he appreciated the great work that the legislators and Rep. Brandt Iden had put into achieving a consensus among the state’s commercial and tribal gaming operators.
One of his major concerns was that if online casinos and online poker were authorized, they would result in a shift by gamblers from the states iLottery program to internet-based gambling at casinos. Michigan’s Lottery online division was launched in November 2014 and since then it has gone on to become a significant contributor to the state’s lottery revenue. As such, the lower tax rates applied to online gambling revenue under HB 4926 compared to tax on online lottery sales would culminate in a significant decrease in funding for the state’s School Aid Fund.
What Next?
It goes without saying that the governor’s veto was incredibly disappointing for the proponents of the bill especially because it came out of left field. To make even worse, the decision has set the bill back by at least a year. According to Brandt Iden, the sponsor of the bill, the veto is a sort of a “ploy to monopolize money coming into the lottery” which is certainly not a “free-market approach.”
That is not the end though – Mr. Iden plans to reintroduce the online gambling bill in 2019 while at the same time working on a draft sports betting legislation. He will, however, need to work harder this time as there are new lawmakers coming in and they will all need to be educated about the bill.
