Lawmakers in Michigan are pushing for a slight increase in gambling taxes. The proposed changes, which would raise taxes by no more than 1.1%, mark a stark contrast to recent legislative trends in other states. The changes are outlined in two separate bills aimed at sports betting and igaming.
Subtle Tax Changes Introduced
Michigan state senators Sam Singh and Jeremy Moss introduced two bills in early December 2024. These bills propose marginal tax increases for sports betting and igaming. The steepest rise would be a 1.1% increase on gross sports betting receipts.
For igaming, even the highest earners in the proposed new tiered taxing system would see a maximum increase of 1%. These modest adjustments are in line with recommendations from the National Council of Legislators from Gaming States (NCLGS). In November 2024, the council suggested tax rates should range between 15% and 25%.
Details of the Proposed Bills
The two bills outline specific changes:
- Senate Bill 1193: This bill proposes raising the tax on commercial sports betting receipts from 8.4% to 8.5%.
- Senate Bill 1194: This bill introduces a tiered tax increase of 1% across five igaming revenue brackets.
Here is a closer look at the details of each proposal:
Senate Bill 1193: Sports Betting Tax Increase
Under Senate Bill 1193, the tax on adjusted gross receipts for Michigan sportsbooks would rise from 8.4% to 8.5%. This increase would benefit the city where the sports betting operator’s land-based casino partner is located. Currently, cities receive 30% of this tax revenue; this share would increase to 31% if the bill is passed. Notably, this change applies only to non-tribal casinos.
Senate Bill 1194: Tiered Igaming Tax Increase
Senate Bill 1194 proposes a 1% tax increase on igaming revenue across five earning brackets. Here’s how the tiers would change:
| iGaming Revenue | Current Tax Rate | Proposed Tax Rate |
| Under $4 million | 20% | 21% |
| $4 million – $8 million | 22% | 23% |
| $8 million – $10 million | 24% | 25% |
| $10 million – $12 million | 26% | 27% |
| Over $12 million | 28% | 29% |
Unlike the sports betting proposal, there is no provision in Senate Bill 1194 to allocate additional tax revenue to cities with land-based casino partners.
Comparison with Other States
Michigan’s proposed tax increases stand out for their subtlety. In contrast, other states have considered or enacted much steeper hikes. For instance:
- Louisiana proposed raising gambling taxes from 15% to 51%, although the measure was quickly abandoned.
- Ohio doubled its sports betting tax rate from 10% to 20% in 2022 but is now considering reverting to the original 10%.
These examples highlight the challenges of implementing substantial tax hikes, making Michigan’s modest approach more likely to succeed.
Rationale for Modest Increases
The failure of steep tax proposals in states like Louisiana and Ohio underscores the difficulty of passing significant hikes. Michigan lawmakers appear to have taken a cautious approach, aiming to avoid the resistance that often accompanies larger increases.
Final Thoughts
If passed, Senate Bills 1193 and 1194 would introduce modest but impactful changes to Michigan’s gambling tax structure. By keeping increases minimal, lawmakers hope to strike a balance between boosting revenue and maintaining industry support. The proposed changes reflect a calculated strategy to ensure the legislation’s viability while adhering to national recommendations on tax rates.
