And then there were… still four, as in the number of US states where online poker has been authorized by law. Michigan came within a signature of becoming the fifth official US online-poker state, falling just short after Michigan Governor Rick Snyder vetoed House Bill 4926 (HB 4926) on Friday.
Though HB 4926 was passed by both the Michigan Senate and House earlier in the week by seemingly veto-proof margins, Governor Snyder’s veto will stand, since both the House and Senate have already concluded business for the 2017-18 legislative session. HB 4926 and two companion bills were sent to Snyder’s desk as the two bodies wrapped up numerous bills, and the three online-poker bills were among 40 that Snyder ultimately vetoed.
Snyder vetoed the online-poker measures on his own next-to-last day in office. The Republican governor was barred from seeking a third term due to Michigan’s term-limits rules, and he will be replaced by incoming Democratic Governor Gretchen Whitmer in January.
However, the expiration of the 2017-18 Michigan legislative session means that the online-poker bills have died a last-minute technical death. The bills will have to be re-submitted, something that primary bill sponsor Rep. Brandt Iden has already announced will occur in January. However, a new bill, likely to be a near mirror image of the vetoed HB 4926, will still need to renegotiate a myriad of Michigan House and Senate votes before, if the process goes well, moving to Governor Whitmer’s desk.
Outgoing Governor Snyder issued a veto letter detailing his reasoning for rejecting the bills. The largest point offered by Snyder was protectionism for Michigan’s existing state-run lottery efforts, though many analysts found much of the reasoning Snyder offered to be suspect. The meat of Snyder’s veto letter offered this:
“A significant amount of work went into these bills and getting them to a place where several stakeholders either expressed support or neutrality, and I appreciate that many pro-gaming stakeholders coalesced around these bills. However, due to largely unknown budgetary concerns, I believe this legislation merits more careful study and comparison with how other states have, or will, authorize online gaming. To be blunt, we simply don’t have the data to support this change at this time.
“Principally, gambling behavior could shift from the State’s ILottery program to internet-based gambling at casinos. In Fiscal Tear 2017, the lottery distributed $924.1 million to the School Aid Fund. For each $10 of spending on the lottery, the School Aid Fund receives approximately $2.76. Under HB 4926, because of its lower tax rate, each $10 in online betting translates into just four cents deposited into the School Aid Fund. Such a significant reduction, without a clearer understanding of internet gambling revenue growth potential, is concerning. Moreover, I am also concerned that revenues may be lost as gambling behavior shifts from on-premises, to online.
“Finally, I am concerned that the bills will encourage gambling by making it much easier to do so. I do not think it is appropriate to sign legislation that will effectively result in more gambling, with a reasonable chance that the state could lose revenue that could be helpful in dealing with social service issues that are ordinarily attendant to increased gambling behavior.”
Several outlets commented on the “Well, duh,” line included in the final paragraph: “Finally, I am concerned that the bills will encourage gambling by making it much easier to do so.” Snyder’s dodging of the entire online-gambling issue in Michigan via the wielding of his veto pen almost certainly denies Michigan an expanded revenue stream from legal gambling activities, despite Snyder’s dissembling claims.
