Representative Brandt Iden was just a signature away from legalising online gaming in Michigan last year. Having shrugged off his bills’ eventual veto by former Governor Rick Snyder, a new legislative effort is now underway. He tells iGamingBusiness.com why the climate is right for the new bills to pass into law – and why the DoJ’s new Wire Act interpretation does not worry him in the slightest.
Representative Brandt Iden came within a whisker of bringing legal betting, gaming and fantasy sports to Michigan in 2018. A trio of proposals he introduced, House Bills 4926, 4927 and 4928, were approved by the two chambers of the state legislature, making it to Governor Rick Snyder’s desk. However Iden’s efforts were ultimately in vain, after Snyder vetoed the legislation – one of his last acts before his term as governor ended.
Undeterred by this setback, Iden has relaunched efforts in 2019, filing House Bill 4311 earlier this month, with Senator Curtis Hertel filing the same proposal in the state Senate. The fact that Iden, a Republican, and Hertel, a Democrat, are working together to legalise gaming highlights the bipartisan support for gaming expansion in the state. Prospects are good, especially as Michigan’s newly installed Democrat Governor Gretchen Whitmer has made public comments suggesting she is willing to consider the move.
While he was only elected to the House in 2015, Iden has been involved in gambling expansion efforts ever since. In his eyes, it makes perfect sense to regulate gambling, something he describes as an effort “to regulate something that already exists in the marketplace”.
Iden has effectively taken over the mantle as the champion of igaming regulation in the state legislature from Senator Mike Kowall, who came to the end of his term limit at the 2018 mid-term elections. It was Kowall who originally asked Iden to spearhead efforts in the House while he worked on his fellow Senators.
“I said absolutely as it’s an effort to protect consumers and generate tax revenue for the state,” Iden says.
But, he adds, it has been a gradual process.
“One of the things that any sort of gaming legislation requires is education,” Iden explains. “There are a lot of stakeholders, from regulators, consumers, vendors, casinos – in Michigan there are 23 tribal casinos and three commercial casinos – and a state lottery.
“Just by virtue of that, and remember I also have 110 counterparts in the house, part of what took us so long to get it to the governor’s desk was the educational component, getting people comfortable with what we are looking to do, understanding why is it important to regulate and why we need to protect consumers.”
What helped progress, he adds, is the fact that gambling is not a partisan issue.
“This is an issue of fairness, about protecting customers, making sure they are not being taken advantage of, and also helping problems with addiction – you can regulate gambling problems much better on the internet – and having the ability to regulate their habits keeps them safe.”
Do your homework
The fact that his proposals, which initially appeared to only have a remote chance of being passed, had garnered such strong support from Democrats and Republicans alike made the veto all the more surprising.
“It was very disappointing,” he says of Snyder’s veto. “Whenever you work hard on something for over two years, building up that level of support only to get a veto in the final days of the governor’s administration – he only had 48 hours left in office – it was very disappointing.
“But when you fall down you have to get back up again, so we got right back up and went back it again,” he says.
Reflecting on Snyder’s decision, Iden says the former governor “didn’t do any of his homework”.
“I don’t believe that he thought I would be able to get the bills to his desk, and because of that he wasn’t up to speed on the issue,” he says. “I think the veto was out of ignorance to some extent.”
In the new legislative cycle things are different. Whitmer has not just made supportive public statements about gambling regulation, Iden says, but has also taken time to work with him to understand the issue.
“Her policy people are up to speed, they’re asking through the right questions and working through the key issues, and I believe that they have seen a good opportunity for good bipartisan legislation,” he adds.
However he adds the changing of the guard necessitated by the 2018 midterms means education once more comes to the fore to ensure new Representatives and Senators understand issues associated with gambling. iGamingBusiness.com is speaking to Iden ahead of a hearing on his proposals in the House Regulatory Reform Committee (on March 19), and he is confident it will progress: “I think you’ll see each bill coming out of committee with strong bipartisan support. My colleagues knew how hard I had worked on it and they would like to see us get this done.”
His optimism proved justified, with the bill passing through the committee with 13 votes in favour, and just one against. It now moves to the House Ways and Means Committe, which Iden chairs.
Wire Act worries – or not
Having suffered a setback with Snyder’s veto, Iden is now confident that the conditions are right for the legislation to pass into law. While HB4311 does not explicitly legalise sports betting, instead giving the Division of Internet Gaming – a new entity created to regulate the market – the option to do so, Iden argues that igaming and sports betting are “intertwined”.
“They go hand in hand,” he says.
As such, he’s hopeful that internet gaming will be up and running for Michigan residents by January 2020, with sports betting not far behind.
“I’d be happy [if we were] able to take Super Bowl bets in our casinos next year,” he says. “We’ll see how aggressive that timeline is but I think there’s an opportunity to get it done. I think we’re in a good spot to get it done quickly, and get our operators up and running.”
And he does not foresee any issues from the Department of Justice’s revised opinion on the Wire Act. Published in January this year, the new stance states that the 1961 legislation applies to all forms of gambling, and not just sports betting as stated by a 2011 interpretation. While this has the potential to bring the US igaming industry to its knees by blocking the transfer of gambling-related data across state lines, Iden simply can’t see the opinion being upheld.
“I think the revised opinion is totally garbage,” he says bluntly. “I’ve looked at it, I’ve reviewed it, and it doesn’t make any sense.
“Under a strict interpretation, it would make the cross-state lotteries [such as Powerball] – which have brought in more than $900m for our public schools – we would have to shut that down.”
Efforts to challenge the DoJ’s new stance are underway, with Michigan Attorney General Dana Nessel filing an amicus brief, alongside 11 other states and the District of Columbia, to the legal challenge launched in New Hampshire.
Even if this challenge fails, Iden doesn’t believe the opinion could be enforced by the federal government: “It would also require the government to act – and considering the problems in Washington I don’t think this is going to happen,” he says.
“I think this was Adelson’s way of firing back at states leading the charge in gaming expansion,” he adds. “The only thing we can do is push forward with the legislation and see if the federal government wants to challenge us. I don’t think they will.”