Michigan Governor Opposes Online Gaming Push, Supporters Have Six Months to Change Her Mind

Posted on: June 25, 2019, 12:57h. 

Last updated on: June 25, 2019, 12:57h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Michigan Democratic Gov. Gretchen Whitmer is not a fan of the state’s legislative effort to legalize online gaming.

Whitmer is at loggerheads with the bill’s sponsor, State Representative Brandt Iden (R-Oshtemo Township), because she feels that a future online gaming market would cannibalize the state’s online and retail lottery revenues, draining money from school programs.

“I’ve said very clearly, over and over again, that protecting the School Aid Fund, ensuring that we get every dollar back into the education of our kids is my top priority,” Whitmer told Michigan Radio this week. “So I’m going to have a hard time supporting anything that doesn’t protect that goal.”

New Jersey vs Michigan

Iden counters the argument that online gaming would impact lottery sales has not been borne out in other jurisdictions that have opted to legalize and regulate. That’s largely because people are playing online already, on the black market, and regulation would channel some of that money back to the state, while ensuring customers are protected.

That’s one of the things that the governor desperately needs right now. She’s looking for increased dollars for roads, she’s looking for increased dollars for education,” said Iden. “What I’m proposing is a way to help get her there and I certainly hope she doesn’t stand in the way of bringing more dollars to kids.”

He’s probably right. New Jersey is the only state with both online gaming and online lottery markets that have reached a level of maturity — as well as having a comparable population to Michigan. It reported record lottery sales last year of $3.3 billion. That beat the previous record set in 2017 by $10 million. Meanwhile, its online casino market — launched late 2013 — is also at an all-time high.

Michigan’s lottery sales were $3.6 billion last year, but it has a higher population by just over a million people — 10 million versus just under 9 million — which makes New Jersey’s lottery more lucrative per capita.

Familiar Feeling

Nevertheless, Iden must be experiencing a creeping sense of déjà vu. In 2018, having united Michigan’s disparate stakeholders, including the state’s commercial and tribal casinos, his bill was passed by the House and Senate, only to be vetoed unexpectedly by Whitmer’s predecessor, Republican Gov. Rick Snyder.

Snyder’s primary reason? That gambling behaviour could “shift from the State’s iLottery program to internet-based gambling at casinos.”

The former governor had given no indication that he planned to veto until he pulled the plug last year, just days before Christmas.

At least his successor is up front about her misgivings from the get-go. Earlier this month the Governor’s Office asked that Brandt remove slots from his online gambling legislation, while almost doubling tax rates.

If implemented, the proposal would have cut the potential revenues from online gaming by an estimated 70 percent, while making the market extremely undesirable for prospective operators.

Iden stood his ground, calling it a “non-starter” and not a meaningful proposal.

The legislature is willing, the governor is not. And because Michigan is one of the few states with a yearlong legislative calendar, Iden still has six months to change Whitmer’s mind.