The tax income generated from online gaming and sports betting associated with Detroit’s trio of casinos has become an essential component of the city’s financial landscape, acting as its second largest source of revenue after income tax, and aiding in funding essential services such as law enforcement, fire departments, and snow clearing, according to both city and state data.
For the initial five months of the ongoing fiscal period, spanning from July to November, Detroit amassed $133 million in wagering tax revenue, exceeding forecasts by around $24 million, as reported by city officials in the latest financial report. This increase is largely attributed to the rise of internet gambling and mobile sports betting, with more residents and users from outside the state placing bets through smartphone applications.
City officials regard this revenue source as exceptionally strong. Donnie Johnson, the deputy chief financial officer and interim budget director for Detroit, shared with The Detroit News that online gaming revenue has shown to be “recession-proof,” referencing trends observed since the COVID-19 pandemic.
“What we discovered during the pandemic and the subsequent mini-economic downturn was that people tended to gamble even more, despite high unemployment rates and economic contraction,” Johnson stated, adding: “We currently see no indicators of a notable decline in this sector.”
Internet gaming generates considerably more tax revenue for Detroit compared to sports betting, although both sectors continue to experience growth. Collectively, online gaming and sports betting now represent approximately half of the total wagering tax revenue for the city, with the remaining coming from traditional, on-site casino gambling.
Detroit anticipates that wagering tax revenue will hit $315 million in the fiscal year ending on June 30, 2026, accounting for 22% of the city’s projected $1.41 billion general fund, based on state revenue forecasts. In fiscal year 2025, the city recorded $306 million in wagering taxes, which marked it as the second-largest revenue source following income tax, according to a recent Plante Moran audit.
The growth reflects wider trends in Michigan’s gambling sector. In 2025, both commercial and tribal operators across the state reported $3.3 billion in adjusted gross receipts from internet gaming and sports betting, marking a 9.5% increase from the previous year based on state data. Michigan legalized sports betting in 2021, allowing nine operators to establish online sports betting or combined gaming platforms.
Detroit employs varied tax rates across different wagering activities, with rates of 10.9% for casino gambling, between 6% to 8.4% for internet gaming, 4.62% for retail sports betting, and 2.52% for online sports betting.
Nevertheless, critics caution that increased reliance on gambling revenues could come at a social cost. Les Bernal, the national director for the advocacy group Stop Predatory Gambling, termed this dependence by cities like Detroit an “epic public policy failure,” asserting that the expansion of online gaming exacerbates addiction and mental health challenges.
Detroit City Council member Denzel McCampbell emphasized the necessity of balancing financial gains with consumer protection. “While the city benefits financially from the increase in wagering taxes, we also need to consider the impact of gambling on our community,” he remarked, adding that safeguards and accessible support must be prioritized.
The reliance on wagering taxes has become more pronounced as other revenue streams, including corporate income tax and state revenue sharing, have fallen short of expectations amid a slowing national economy. City officials are scheduled to reassess their forecasts at Detroit’s upcoming biannual Revenue Estimating Conference on Friday.