Michigan Senate Blocks Increased Taxes on Sports Betting and iGaming Platforms
As we continue to help you find the best odds and top-rated platforms for sports betting in Michigan, state legislators have stripped Governor Gretchen Whitmer’s proposal to raise taxes on mobile sportsbooks and online casino operators from their upcoming budget.
No New Taxes
Democratic Governor Gretchen Whitmer may have thought her proposed tax increases on sports betting platforms would pass in the Democrat-controlled Senate. However, she miscalculated, and her colleagues voted to strip the tax hikes from the state’s $88.1 billion budget.
The Republican-controlled House was adamantly opposed to Whitmer’s several sin taxes and others that were projected to net the state $800 million, $200 million of which would have come directly from sportsbooks and iGaming platforms.
The budget is now in final negotiations, where the two chambers are expected to bridge the gap between the House’s proposed $78 billion budget and the Senate’s $88.1 billion spending plan. Michigan’s deadline is July 1st for a finalized budget.
Governor Whitmer’s proposal would have had a multi-pronged approach to siphoning revenues from the state’s digital gaming platforms. The proposed per-bet tax would levy a 25-cent fee on each of the first 20 million wagers per year and 50 cents for every bet thereafter, with an estimated revenue haul of $39 million in taxes.
But that was only the beginning, as the governor also proposed to end marketing promotions, which would have brought another $21 million from the sportsbook operators. The most significant tax hike would have negatively impacted the biggest iGaming operators, maintaining the 28% tax rate for the first $185 million in revenue and then soaring to 36% on any revenue generated over that amount, netting the state another $136 million.
Following the Senate’s swift rebuke of the governor’s proposed taxes on sportsbooks, tobacco, vaping products, and digital advertising, State Senator Sarah Anthony stated, “We have not contemplated new revenue, particularly those sin taxes the governor has put forward, but we’re open to that conversation. We want to be sure that we’re being mindful of what revenue options are there and whether they’re impacting working families.”
Rebound Effect
Had the governor’s recommendations been included in the budget, it would have had a chilling effect on the state’s gaming industry. Any tax increase or deduction in promotional bonuses would have been passed on to the consumer by the sportsbooks.
As seen in Illinois, the per-bet tax imposed on the sportsbooks was simply transferred to the customers, which has resulted in lower gross revenue. Since the per-bet tax was instituted on July 1, 2025, a report by the Illinois Gaming Board (IGB) revealed that 6.4 million fewer bets were made in October 2025 than in the previous October. The city of Chicago has subsequently imposed a 10.25% tax on sports betting operators’ revenue on top of the state’s per-bet tax.
As for stripping promotional bonuses, fewer incentives to bet would mean a lower handle and ultimately decreased revenue for the operators and, by default, the state’s tax coffers.
The sports betting industry trade group, the Sports Betting Alliance (SBA), has repeatedly railed against the tax increases and reductions in promotional deductions that have become popular in many state legislatures.
“The IGB’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,” the SBA said in a statement earlier this year. “This is a warning sign, and with Chicago city leaders lumping even higher taxes on fans, Illinois lawmakers are putting at risk the very sturdy regulated market they’ve built since legalization.”
