Michigan is looking to introduce a new per-bet tax on sports betting, replicating the model Illinois implemented last July.
The new duty would see operators pay $0.25 on each bet for the first 20 million placed per year. The fee would then increase to $0.50 per bet beyond that threshold.
The state’s fiscal 2027 state budget, introduced by Governor Gretchen Whitmer, noted that should the tax be implemented, it will generate $38.8m in revenue.
The funds will be given to the Medicaid Benefits Trust Fund for health and wellness programmes.
The document read: “A new tax would also be imposed on each sports betting wager. A new 25 cents per bet tax would apply on a licensee’s first 20 million wagers annually.
“For wagers after 20 million, the tax on those would increase to 50 cents per bet. The same tax was enacted in Illinois last year.
“Michigan’s sports betting tax rate currently ranks 28th out of the 30 states that have legalised the activity.”
Alongside the new sports betting tax, Whitmer proposed eliminating the tax deduction operators get on free bets.
If introduced, this would raise a further $21.1m for Prairie State coffers. The funds would also to be given to the state’s health and wellness programmes.
The governor has additionally suggested raising the tax rate for the state’s online casinos.
If passed, operators which report more than $185m in adjusted gross receipts (AGR) would face a duty increase of eight percentage points to 36%.
The briefing added: “Michigan’s internet gaming market is the largest among the seven states that have legalised the activity.
“In 2025, casinos generated $2.9bn in adjusted gross receipts, representing Michigan players’ net losses to the casinos.
“Pennsylvania casinos, one of the nation’s largest markets, generated 10% less casino profits from online gaming, but paid roughly 50% more tax, compared to the internet casinos in Michigan.
“The governor’s budget proposal introduces a new higher marginal tax rate that applies only after a casino operator earns more than $185m in AGR within a year.
“For revenues above this threshold, the tax rate on online games would increase by eight percentage points, bringing the total rate to 36%.
“The majority of internet casino profit comes from online slot machines, and Michigan’s new 36% tax rate would remain significantly lower than Pennsylvania’s 54% rate for internet slots.”
Per the briefing papers, only three operators met the new tax threshold.
If that were to happen should the tax be passed, it would generate $135.5m in revenue, which would be given to not only the health and wellness programme but also the Michigan Agricultural Equine Industry Development Fund.
Passed into law in May 2024, Illinois’ change from 15% of GGR to a sliding scale that tops out at 40% made it the state with second-highest tax burden on operators.
Then, last summer, the state introduced the per-wager fee, much to the chagrin of operators.
The new fee was met with resistance from the Sports Betting Alliance (SBA) and the Responsible Online Gaming Association, with the SBA reporting last month that the new tax has directly led to fewer wagers being placed in Illinois.
The SBA said: “The Illinois Gaming Board’s recent data illustrates more alarming evidence that tax hikes are creating a lose-lose situation for fans, where they’re either being forced to pay higher fees or left to abandon the legal sports betting market.”
In response, Flutter Entertainment introduced a $0.50 fee on all bets last September to offset the transaction fee, with DraftKings likewise bringing in its $0.50 surcharge as well.
The post Michigan proposes new per-wager sports betting tax to boost state coffers first appeared on EGR Intel.
Governor Gretchen Whitmer’s proposal mimics Illinois framework introduced last year, while largest operators also in line for increased online casino duty to 36%
The post Michigan proposes new per-wager sports betting tax to boost state coffers first appeared on EGR Intel.