A 10-bill package legalizing sports betting and online gambling passed the House Wednesday with bipartisan support.
Rep. Brandt Iden, R-Oshtemo Township, told The Center Square the bills aim to protect consumers from using illegally operating offshore websites accessible through any web browser while paving an avenue for extra tax revenue to flow to public schools and the Compulsive Gambling Prevention Fund.
“People put in their information, subject to privacy concerns, and importantly, if they win, oftentimes they don’t get paid,” Iden said, adding that many people he talks to don’t even realize that it’s illegal.
Former Gov. Rick Snyder vetoed similar bills at the end of last year, and Gov. Gretchen Whitmer voiced the same concern that these bills could siphon revenue from the internet lottery in Michigan, which partly flows into the School Aid Fund.
“However, I believe that with the tax structure that we’ve set up, as well as directing the funds to the School Aid fund, we’ll be able to make sure there’s even more revenue in the School Aid fund at the end of the day,” Iden said.
The bill piggybacks on a 2018 United Supreme Court decision that legalizes sports gambling nationwide, and follows about 12 states that already allow some forms of online gambling,
Iden said Indiana attracted $34.5 million in wagers in its first month of offering sports wagering at its casinos.
The plan allows the Michigan Gaming Control Board to regulate internet gaming and prohibits casinos from offering online games that directly compete with games sponsored by the Michigan Lottery.
The expanded gambling could eventually generate between $80 million and $100 million in new tax revenue, Iden estimated.
Iden cited New Jersey as one example that legalized internet gaming doesn’t necessarily shrink lottery revenue. The state topped $3.2 billion in the 2016 fiscal year after legalizing sports betting.
Iden said the sports betting bills would be taxed at 8.75 percent, and the internet gaming bill would have a tiered tax rate ranging from 4 percent to 23 percent.
Detroit’s three casinos are currently taxed at 19 percent.
The legislation moves to the Senate for future consideration.