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Michigan nears deal to legalize sports, online gambling

LANSING (AP) — The Legislature and Gov. Gretchen Whitmer are closing in on an agreement to legalize sports betting and internet gambling in Michigan, with final votes possible this week.

The development would be a landmark in a state with many gambling options already. Those include three commercial casinos in Detroit, 24 tribal casinos across western and northern Michigan, and the Lottery, which also has an online component.

The abundance of competition is a complicating factor, primarily due to concerns that letting casinos offer online gambling would hurt rapidly growing revenues from the state’s iLottery. The Lottery sent nearly $1 billion to the state’s school fund in the last fiscal year for which figures are available, 7% of which came from online games.

The Whitmer administration has worried about the ìsubstitution effectî — that people who play the Lottery online will move to playing poker and other internet games offered by the casinos, particularly in the long term as they become more comfortable using electronic devices to gamble. While the initial crossover would likely be small, the financial impact could be bigger.

For a net win of $1,000 from the iLottery, schools get $700. A $1,000 net win from Detroit casino slots is taxed at 19%, with less than half — about $81 — going to schools.

The Republican-led Legislature and Democratic governor have worked to find a sweet spot, so the school aid fund would be protected while online games could be taxed at a rate that lets casinos do business and attract new players.

“I believe we’ve made a lot of progress with stakeholders and the administration on coming to an agreement,” said Sen. Curtis Hertel Jr., an East Lansing Democrat. “The administration had some real concerns and we took those into account. We’re going to make sure that the school aid fund is healthy going forward.”

Legislative staffers and aides to Whitmer planned to work through the weekend reviewing proposed Senate changes to bills that passed the House in October. The Senate Regulatory Reform Committee and full Senate could vote Tuesday, one of the last days of session before legislators break for the year.

One revision, Hertel said, would permanently earmark some of the new gambling revenue to a state fund that compensates first responders for lost wages and medical benefits if they get cancer from fighting fires.

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