Betting USA has obtained a draft of a substitute bill meant to replace the current sports betting bill (HB 4916) in the Michigan House of Representatives.
The hope is the changes in the new draft will facilitate a compromise between sports betting proponents in the Michigan legislature and the governor’s office.
There are three significant changes to the legislation.
Legislature Gives a Little on Taxes
The most impactful change has to do with the overall tax rate.
The base tax rate of 8% is unchanged. However, the new bill also requires an additional 1.25% tax on sportsbooks located in cities (Detroit) that currently pay a 1.25% municipal service fee.
“In addition to payment of the tax and other fees as provided in this act, and to any payment required pursuant to an existing development agreement described in this subsection (3), if a city has imposed a municipal service fee equal to 1.25% on a casino licensee, the city shall charge a 1.25% fee on adjusted gross sports betting receipts of a sports betting operator that holds a casino license under the Michigan Gaming Control and Revenue Act… whose casino is in that city.”
While the 1.25% municipal service fee represents a 10% increase from the previous bill, it’s well short of Gov. Gretchen Whitmer’s proposal of 15% plus an additional 3.25% municipal service fee.
Tax Rates Go Up; License Fees Go Down
The governor is also likely to be nonplussed with the new bill slashing licensing and renewal fees.
- Sports betting license fees are cut in half in the new bill, from $200,000 to $100,000.
- Renewal fees are also halved, from $100,000 to $50,000, with the term extended from 1 Year to 5 Years.
Those changes will cost the state several million dollars.
Under the previous licensing structure, the state would receive $700,000 from each license holder over six years. Under the new structure, it will receive $150,000 per licensee over the same time.
Online Skins Added to the Bill
The original bill allowed each licensee one individually online sports betting site. Under the new bill, licensees are allowed one individually branded sports betting website, and one skin, using the brand and logo of a supplier, if, as is the case in Pennsylvania, the skin identifies itself as a sub-brand of the main license holder.