Michigan Governor Gretchen Whitmer has announced a proposal that would implement a per-bet sports tax on mobile sportsbooks and a tax increase on iGaming platforms operating in the Great Lakes State for FY 2027.
Revenue Increase Proposal
A reduction in federal funding has spurred Michigan Governor Gretchen Whitmer to recoup those funds in new legislation aimed at levying a per-bet tax on sportsbooks and an increase in online casino revenues, among other measures.
The per-bet tax would mirror the same levy recently imposed by Illinois legislators in that it would charge sportsbooks 25 cents for the first 20 million bets and 50 cents for each additional wager thereafter.
The proposal would also eliminate free bet tax deductions currently available to sportsbooks to promote their product and incentivize new customers to access their platforms. Lastly, Governor Whitmer is seeking to increase the graduated tax rate currently at 20% to 28% on mobile casino revenue to 36% once the iGaming platforms generate more than $185 million in annual adjusted gross receipts.
The increases, which would go into effect on October 1st, are projected to generate an additional 33%, or $195.4 million, in taxes in fiscal 2027. The new increases would primarily impact the major online gaming operators, DraftKings, FanDuel, and BetMGM.
Illinois Betting Volume Slumps
The bottom line always speaks louder than any other metric, and the numbers in Illinois reflect an online and retail sportsbook record handle of $1.66 billion in November 2025.
But more importantly, the hold rate soared as well, leading to a record $169.1 million in adjusted gross revenue for a single month in the Land of Lincoln.
These records were set despite Illinois implementing a per-bet tax that levies 25 cents on each of the first 20 million bets and 50 cents for each additional wager that began in July of 2025. These impressive numbers have caught the attention of Michigan’s governor, who is currently proposing an identical per-bet tax.
But despite the 8.1% year-over-year handle increase in November, reports show that 6.1 million fewer bets were placed in November and at least 5 million fewer in each of the preceding three months since the per-bet tax went into effect.
Industry Backlash
Many Illinois customers are directly bearing the brunt of the tax, as DraftKings and FanDuel have passed the cost onto their consumers, charging 50 cents for each wager to offset the per-bet charge they are now required to pay, while other platforms have increased their minimums.
The Sports Betting Alliance (SBA), which represents DraftKings, FanDuel, Fanatics, and bet365, has railed against the per-bet tax, arguing it will force customers away from domestic markets. And if that wasn’t enough, as of January 1st, 2026, Chicago authorized a 10.25% tax on all sportsbooks’ revenues derived within the city limits.
