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May 27, 2019

Out of fear of 'reduced lottery tax revenue for schools'

Snyder vetoes online gambling, fantasy sports betting bills

Snyder vetoes online gambling, fantasy sports betting bills
Governor Snyder said he's worried the proposed tax structure for online gambling could deplete the Michigan Lottery's proceeds to the $14 billion School Aid Fund, which topped $924 million in the 2017 fiscal year.
United States | 01/02/2019

The veto of the internet gambling bills were part of a barrage of actions Snyder took on Friday as he signed 175 bills lawmakers sent him last week and vetoed 41 other bills, including a controversial measure that would have given the Legislature attorney general-like powers to intervene in state lawsuits.

G

ov. Rick Snyder on Friday vetoed legislation that would have authorized online gambling in Michigan through Detroit's three casinos and out-state tribal casinos because of his fear of reduced lottery tax revenue for schools and concerns about making it "much easier" to gamble.

The outgoing Republican governor has vetoed six bills aimed at creating a regulatory structure for internet gambling and fantasy sports betting as well as making changes to the state's horse racing law.

"I am concerned that the (internet gaming) bills will encourage gambling by making it much easier to do so," Snyder wrote in a veto letter sent Friday to legislators. "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."

The veto of the internet gambling bills were part of a barrage of actions Snyder took on Friday as he signed 175 bills lawmakers sent him last week and vetoed 41 other bills, including a controversial measure that would have given the Legislature attorney general-like powers to intervene in state lawsuits.

Snyder also vetoed two bills that would have rescinded all rules the Michigan Gaming Control Board put in place in recent years to closely regulate charitable gambling halls that host so-called "millionaire parties."

"This legislation, if signed, would undermine the work the (Michigan Gaming Control Board) has done over the past six years and return millionaire parties to a underregulated market ripe with potential for fraud and abuse," Snyder wrote in a veto letter for House Bill 4081 and Senate Bill 35.

The online gambling legislation had wide bipartisan support, with more than three-quarters of legislators voting in the final days of the lame duck session to override the 1996 voter-approved law that authorized Detroit's three casinos.

"A significant amount of work went into these bills and getting them to a place where several stakeholders either expressed support or neutraility, and I appreciate that many pro-gaming stakeholders coalesced around these bills," Snyder wrote in his veto letter. "However, due largely to unknown budgetary concerns, I believe this legislation merits more careful study and comparison with how other states have, or will, authorize online gaming."

The accountant by trade added: "To be blunt, we simply don't have the data to support this change at this time."

Snyder said he's worried the proposed tax structure for online gambling could deplete the Michigan Lottery's proceeds to the $14 billion School Aid Fund, which topped $924 million in the 2017 fiscal year.

The difference between the current tax structure from the Michigan Lottery and scheme outline in the legislation is a margin of 69-to-1, according to the governor's office.

"For each $10 of spending on the lottery, the School Aid Fund receive approximately $2.76," Snyder wrote. "Under HB4926, because of its lower tax rate, each $10 in online betting translates to just four cents deposited into the School Aid Fund."

Detroit Mayor Mike Duggan's administration lobbied for a late change to the legislation to ensure the city's roughly $180 million in annual wagering taxes would not be reduced.

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