Legalized Sports Betting – On The Horizon For Michigan?

Feb 13, 2019

The multi-billion dollar business is now legal, thanks to 2018 U.S. Supreme Court ruling. 

EAST LANSING, Mich. - The money, the addiction, the thrill. This is the world of sports betting. Within the upcoming year, Michigan could be the next state to legalize wagering on sports.

Sports betting is a hot topic because, in May 2018, the U.S. Supreme Court overturned a 1992 law prohibiting states from legalizing sports gambling. Nevada, Mississippi, West Virginia, New Mexico, Delaware, New Jersey, Pennsylvania, and Rhode Island have already now legalized sports betting, and many more are expected to follow.

Credit Rita Alexandrea / Flickr

“The money is the key to sports gambling becoming legal,” said Trevor Darnell, a Michigan State alum who is a ticket writer at South Point Casino in Las Vegas. “For example, we don’t have any of our December numbers in yet, but throughout all the sports books in Las Vegas, they brought in $21.7 million in the month of November. That’s just sports gambling itself in the state of Nevada, so it does bring in a lot of money.”

Darnell, who handles bets and pays out winning tickets for customers, thinks that if sports gambling comes to Michigan it will not only bring books into casinos but also add increased traffic to those cities. This, in turn, will bring in more money.

“Say you put a sports book in four different major casinos in Detroit. You’re going to have people coming in from every suburb in the state of Michigan coming down to Detroit every Saturday and Sunday to bet on football. During the week you’ll get people coming in to bet on basketball and baseball,” said Darnell. “If you do that, people will make their bet and they’ll go next door and have dinner with the husband or wife in Detroit. So it’s not just the sports gambling that will help, it will also help the atmosphere of a big city like Detroit.”

While there is support for sports betting, there is also some opposed to it. The issue of corruption – or the even the perception of it – lingers in sports and gambling. Take the Jan. 20 Saints vs. Rams NFL playoff game, which was influenced by officials’ non-call on pass interference. If sports betting was legalized, there could be a perception that the official had money on the game. Gambling could be the reasons why things go wrong.

According to Dave Dye, a journalist for Gaming Today magazine in Las Vegas, if gambling were legalized, he believes there would be fewer gambling scandals.

“People are betting on sports and they’re doing it illegally. If you have a legalized or regulated market, you’re much more likely to be aware that something is going on and you can try to stop it or penalize people for it,” said Dye, who also is an MSU alum. “If it’s an illegal market, then things can go on and nobody knows about it and it just kind of goes and gets brushed aside. The casinos don’t want to get burned by people who are fixing games and making money off of them.”

According to the American Gaming Association (AGA), the illegal sports betting market is estimated to be worth $150 billion. For states like Michigan that are on the verge of legalizing sports betting, this shows the amount of betting that is already going on underground. The AGA also projects that the NFL, NBA, NHL, and MLB could earn a combined revenue of over $4.2 billion per year just through TV ads, sponsorships, and media rights if sports gambling was a regulated market.

States who have legalized sports betting are also seeing an increase in tax revenue. Pennsylvania has a tax rate of 36%, which is imposed on casino revenues. Casinos also have to pay federal taxes. Nevada, in comparison, has a tax rate of 6.5%, and the state brought in $27 million in taxes in Nov. 2018. Pennsylvania’s was $508,996 in Nov. 2018.

“You have to put these casinos in a position where they can make money and compete and drive out the illegal market because if you put taxes so high in the casinos, you have to then do things like add worse odds and make it more difficult,” said Dye. “Many people will continue to bet illegally because those illegal bookies don’t have to pay those taxes. I think that’s one thing that states have to be aware of. Make sure they can put the casinos in a low-profit, low-hold type of gambling.”

Michigan moved closer to sports gambling in Dec. 2018, with a bill that passed to legalize online poker and casino games. The bill allows online wagers on any “amateur or professional sporting event” but not on-site, physical sports gambling. This bill will take effect three months after it is signed into law and will take an additional year to establish regulations and issue licenses. If sports betting becomes regulated, it would make Michigan the first state in the Midwest to have legal sports betting.

“Michigan has been on the verge of legalization for a little while now, and I know there have been rumblings out here in Vegas that Michigan is one of the next to go,” said Darnell. “I do expect there’s a good chance.”