Michigan Governor Gretchen Whitmer has made a request through the Michigan Department of the Treasury to remove slots from proposed online gambling legislation as well as calling for substantially higher tax rates than are being proposed.
Whitmer has opposed online gambling in the state saying it will cannibalize the state’s lottery as well as hurt brick-and-mortar casinos.
State Rep. Brandt Iden said the request is a “non-starter.”
However, he said he will move to raise the proposed tax rate and allocate a larger percentage of tax revenue to the state’s School Aid Fund in committee before moving the bill to a vote. The Governor’s position, however, has delayed the bill going to a vote until at least July or August.
“The intent has been for us to increase the tax rate to allow slots in the conversation,” Iden told Online Poker Report. “Increasing tax rates and removing slots is really a non-starter. It can’t be done. That proposal wasn’t meaningful, in my opinion.”
The Treasury estimates annual tax revenue would bring $27.8 million to the state, $10.8 million to Detroit, and $600,000 to the School Aid Fund. The estimated average tax rate among casinos in the state would range from 8% to 31.2%.
Iden initially proposed an 8% base tax on revenue, plus another 1.25 percent local share for commercial casinos.
“The fact they continue to believe money will go away from lottery into iGaming, rather than iGaming bringing in new players, is an epic failure to see what is happening in marketplaces across the country,” Iden said. “That’s why it’s disappointing to see that proposal.”
According to Iden, the Treasury argues that online slots represent the most direct competitor to the Michigan online lottery.
“For the governor to continue trying to have a monopoly on iGaming in the state is going to be a problem,” Iden told the website. “In my opinion, if we cannot find a landing spot, the state is in a very risky position to potentially have a lawsuit challenging our lottery because we’re not allowing other gaming entities to compete in the marketplace.”