The Michigan House has passed the legislation which legalise online gambling and sports betting in the state. The legislation, which also would regulate the fast-growing paid fantasy sports industry, was sent to the GOP-led Senate for future consideration.
An 8.75% tax would be collected on sports wagering receipts, minus winnings paid out — less than a 19% tax now paid by Detroit’s three commercial casinos. The city of Detroit could also collect an additional 3.25% tax, said Rep. Brandt Iden, the sponsor of the main bills.
The tax rate for online gambling, excluding sports bets, would range between 4% and 19% in the first three years depending on much internet revenue a casino generates. It would rise to 6% to 21% in year four and, in year five and beyond, go to between 8% and 23%. Detroit could collect an extra 3.25% tax.
“The tax rate went north. We got her more than half of what she asked for on both internet gambling and sports betting. The money was directed to the school aid fund. My directive, from what I had always heard, was protect the school aid fund. I believe that these bills did that. So it’s very confusing to me when the governor says they’re not in support,” Iden said.
“We continue to have revenue concerns regarding the bills’ negative impacts on the school aid fund. The administration has taken every meeting we’ve been invited to regarding this legislation and will continue to work closely with the bill sponsor, tribal leadership and stakeholders to attempt to address our concerns,” Whitmer spokeswoman Tiffany Brown said.
The U.S. Supreme Court in 2018 paved the way for all 50 states to allow sports gambling. It is underway in 13 states and has been authorised in five more, according to the American Gaming Association.