A bill to increase a sports betting tax in Michigan, put forward by Democratic Governor Gretchen Whitmer, has been ignored by lawmakers in the latest state budget.
Some analysts have been surprised by the move, given the Senate remains under democratic control. However, the $88.1 billion budget was passed without including the bill, which would have raised an estimated $800 million in extra revenue.
Online casino tax proposal also cut from budget
Whitmer’s proposal also sought to raise taxes on online casino operators by increasing the rate on higher levels of revenue. Under the plan, operators would continue paying the current 28% tax on annual revenue up to $185 million, but revenue exceeding that threshold would have been taxed at 36%, which represents an 8 percentage point increase.
When asked about the prospective tax rises in the budget at a press conference, House Speaker Matt Hall said: “We’re not going to do any of that. There will be no tax increases in this budget when we do this deal.”
Even some Democratic lawmakers weren’t convinced by the proposals. Democratic State Senator Sarah Anthony said: “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.”
The two chambers in the state are now focusing on reaching a deal before the July 1 deadline.
Rejected bill sought tiered tax rates on profits
Whitmer’s revenue proposal aimed to raise nearly $200 million annually through a series of sports betting and iGaming tax changes, including a per-wager fee modeled after Illinois, the elimination of promotional deduction write-offs for sportsbooks, and a higher 36% tax rate on online casino revenue exceeding $185 million.
Under current law, retail sportsbooks operating at Detroit casinos pay an 8.4% state tax on adjusted gross sports betting receipts. Detroit also collects an additional municipal wagering tax, increasing the effective burden on in-person sportsbook operations.
Online sportsbooks, including operators such as DraftKings, FanDuel and BetMGM, are taxed at 8.4% on adjusted gross sports betting receipts statewide. The tax rate is considered relatively moderate compared with some other large gambling states. New York, for example, taxes online sportsbook revenue at 51%, while Pennsylvania imposes a rate near 36%.
Last year, Michigan’s online gambling market continued its steady growth, led by FanDuel, which overtook BetMGM as the state’s top online casino operator. FanDuel generated $817.1 million in revenue during 2025, up from $614.6 million in 2024 and ahead of BetMGM’s $782.5 million total. The company also reported $73.3 million in online casino revenue in January 2026, nearly $8 million more than its closest competitor and more than 16% higher than the same month a year earlier, underscoring its growing position in Michigan’s expanding iGaming market.
Michigan rolls out youth gambling awareness program
Elsewhere, the Michigan Gaming Control Board (MGCB) has created an initiative called “Don’t Bet On Your Future”, a statewide campaign designed to restrict underage gambling and teach young people about the pitfalls of gambling.
There are hopes the move will rein in the increasing number of young people who are turning to gambling sites for entertainment or, more commonly, an ill-perceived method of making money.
MGCB Executive Director Henry Williams said: “Don’t Bet on Your Future’ is about building a statewide community of education and prevention. We are committed to ensuring the next generation understands the real risks of gambling before they ever place a bet.”
The campaign centers on a new High School Boosters Program that allows eligible school-affiliated booster clubs to earn as much as $4,000 for promoting responsible gambling messages approved by the MCGB.
Participating booster organizations can distribute educational materials through scoreboards, newsletters, social media, game-day programs and other school communication channels. The initiative is designed to use trusted community organizations to raise awareness about the risks of underage gambling.
Michigan’s most recent gambling awareness campaign, “Don’t Regret the Bet”, received multiple national honors for its responsible gambling messaging. Most recently, it earned a Gold Shorty Impact Award, recognizing digital and social media campaigns that drive positive social impact.
