As outlined in our December 21, 2018 newsletter, before adjourning for the year, the Michigan legislature passed an omnibus gaming legislation package addressing amendments to charitable gaming, authorization and regulation of internet gaming, authorization and regulation of fantasy sports, permitting third party advance deposit wagering companies to work with Michigan’s racetracks to permit live and simulcast horse races over the internet, and amending the Michigan Gaming Control Act to modify and modernize supplier and occupational licensing procedures.  As part of the deal worked out with the interested parties and legislators, the bills were tie-barred to each other and were presented as a package.

Unfortunately for gaming proponents, out-going Governor Rick Snyder vetoed the package of bills December 28, 2018 before his term ended at the end of the year.  In a letter explaining his decision to veto the internet gaming legislation, Governor Snyder expressed concern that “we simply don’t have the data to support this change at this time.”  He raised concerns that adopting the online gambling would negatively impact the revenue the state and the school aid funds are currently receiving from the Michigan Lottery’s iLottery program.  He also stated his concern that “revenues may be lost as gambling behavior shifts from on-premises, to online.”  Lastly, Governor Snyder expressed unease with the concept that permitting online gambling would make gambling “much easier to do…” and that it might reduce revenue that is used for “social service issues that are ordinarily attendant to increased gaming behavior.”

The sponsor of the online gaming bill, Rep. Brandt Iden (R-61stDistrict), responded by stating he’s disappointed, noting that “anyone can gamble at any time” in Michigan.  Before the vetoed legislation, Rep. Iden had indicated his desire to sponsor legislation in the new legislative session to clarify that sports wagering is legal in Michigan.  It seems likely that he will also spearhead a push to re-introduce much of the legislation passed by the House and Senate in 2018 and see if the new governor, Democrat Gretchen Whitmer, might have a more favorable view towards it.

With respect to the charitable gaming legislation, Mr. Snyder stated that the repeal of the administrative rules developed by the Michigan Gaming Control Board would result in a reversion to many of the problems he said plagued unregulated Millionaires Parties prior to his transfer in 2012 of regulation from the Michigan Lottery to the MGCB.  He stated: “This legislation, if signed, would undermine the work the MGCB has done over the past six years and return millionaire parties to a underregulated market ripe with potential for fraud and abuse.”

Governor Snyder didn’t formally express any objections to the third party advance deposit wagering bill, merely noting in his letter accompanying the veto that the bill: “was tie-barred to House Bill 4926 [online gambling bill], which I previously vetoed.”  He also was somewhat vague in his disapproval of the fantasy sports bill, stating: “While I am sympathetic with the idea of regulating fantasy contests in a manner consistent with recent federal law changes, I understand that there are many important factors, some of which may be unknown at this time, to evaluate before proceeding with a substantial regulatory structure that has such a significant potential impact to Michigan citizens.”


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