Possible Increase in Michigan iGaming and Sports Betting Taxes |

Published on: December 13, 2024, 02:13h.

Last updated on: December 13, 2024, 02:13h.

Michigan Senate has introduced a new legislation to increase taxes on revenue earned from online casino gambling and sports betting, both in retail locations and on mobile platforms.

Michigan iGaming sports betting tax — Michigan Sen. Sam Singh wants the state to receive a larger cut from commercial iGaming, in-person sports betting, and online sports betting. The state’s three commercial operators say such a tax raise would put them at a competitive disadvantage with operators partnered with Native tribes. (Image: MI.gov)

Two senators, Sam Singh and Jeremy Moss, have proposed Senate Bills 1193 and 1194 to increase taxes on sports and iGaming revenue from commercial operators.

SB1193 would raise the tax on gross sportsbook win for online and retail operations by 0.1% to 8.5%. SB1194 aims to increase the tax on gross gaming revenue from commercial iGaming sites and apps by 1%.

Michigan currently taxes iGaming on a graduated scale. The proposed tax increase would affect operators based on their annual gross gaming revenue.

The bills have been referred to the Senate Government Operations Committee, where Singh and Moss hold positions.

Operator Concerns

The proposed tax hikes by Singh and Moss would only impact commercial operators, not tribal gaming establishments. Any changes to tribal gaming tax rates would require amendments to the Native Americans’ Class III gaming compacts.

Detroit hosts the only commercial casinos in Michigan. These properties were allowed to expand online gaming operations in 2019, offering casino games, poker, and sports betting.

Each Detroit casino is partnered with a specific iGaming and sportsbook operator. MGM works with BetMGM, MotorCity with FanDuel, and Hollywood Greektown with ESPN Bet.

BetMGM, FanDuel, and ESPN Bet oppose the proposed tax increases by Singh and Moss, citing concerns about competitiveness with tribal operators.

Both commercial and tribal sports betting revenue is taxed at 8.4%, with tribal iGaming following a similar tax structure.

Commercial vs. Tribal

From January to October 2024, commercial iGaming from BetMGM, FanDuel, and ESPN Bet generated $1.058 billion, while tribal operations earned around $913 million.

Notable operators partnered with Michigan tribes include DraftKings, Caesars Sportsbook, Golden Nugget, and BetRivers.

In the same period, BetMGM, FanDuel, and ESPN Bet saw $247.4 million in online sports betting revenue compared to $134.6 million from tribal operations.

Michigan has collected over $363 million from iGaming and $12.5 million from online sports betting in 2024.

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