Legislative efforts to adjust Michigan’s gambling tax structure have officially ended as of January 1, with Senate Bills 1193 and 1194 failing to progress before the close of 2024.
The bills, introduced by Senators Sam Singh and Jeremy Moss, sought modest tax increases on sports betting and online casino operators, but the proposals will not carry over into 2025 unless reintroduced.
The legislation aimed to increase the sports betting tax rate from 8.4% to 8.5%, a minor adjustment unlikely to significantly impact operators. The bills also proposed changes to how tax revenues are allocated.
Currently, 65% of funds go to the Internet Gaming Fund, 30% to Detroit services, and 5% to the Michigan Agriculture Equine Industry Development Fund, capped at $3 million. The proposed changes would have reduced the Internet Gaming Fund’s share to 63.5%, increased Detroit’s allocation to 31%, and raised the agriculture fund’s cap to 5.5%.
For online casinos, the legislation proposed raising tax rates by one percentage point across all revenue brackets. Operators generating less than $4 million annually would have seen their rate rise from 20% to 21%, while those earning $12 million or more would have faced a 29% tax rate, up from 28%.
Despite the minimal increases, the measures failed to gain traction in the final weeks of 2024. Without any action from lawmakers, the bills expired when the legislative session ended, leaving Michigan’s existing gambling tax structure intact.
Michigan remains one of the most tax-friendly states for gambling operators. Current laws allow sports betting operators to deduct promotional spending from their taxable revenue, effectively lowering the lifetime tax rate to 5.0% and 4.7% year-to-date.
Online casinos benefit from similar provisions, with up to 10% of gross revenue eligible for promo spend deductions, though this figure will drop to 6% in 2025 under existing rules.
