The Michigan gambling tax is potentially set to rise by a very modest 1% or less thanks to the tiered system proposed by lawmakers.

This bucks recent trends, as other states have tended to go for steep tax hikes in their legislative changes. However, the two bills proposed by the MI state senators – one for sports betting and one for casinos – will see a maximum rise of just 1.1% if passed.

The changes to Michigan gambling tax – A short summary

Michigan state senators, Sam Singh and Jeremy Moss, have proposed two separate bills. The two bills were proposed in early December 2024, and if passed they will introduce very subtle tax rises. The steepest potential tax rise is 1.1% on gross sports betting receipts.

When it comes to igaming, even the top earners in their proposed new tier taxing system will only see a maximum rise of 1%. These changes have been proposed following advice from the National Council of Legislators from Gaming States (NCLGS), who in November 2024 implied that tax rates should fall between 15% and 25%.

Michigan sports betting tax
– A breakdown of the two bills

There are two separate bills that propose two different types of tax rises:

• Senate Bill 1193
  – Proposes a rise from 8.4% to 8.5% on
  all Michigan sportsbooks’ adjusted gross receipts.
• Senate Bill 1194
  – Would raise igaming revenue taxes by 1% in all five earning brackets.

Now let’s take a look at these two proposals in a little bit more detail:

Senate Bill 1193 – Up to 1.1% rise in
sports betting tax in Michigan

This bill aims to raise commercial sports betting receipts tax from 8.4% to 8.5%. This tax rise would go directly to the city where the sports betting operators’ land-based casino partners are based.

Currently, the cities get 30% tax from the sports betting company and their casino partner, and this will rise to 31% should the bill be passed. However, this tax rise applies to non-tribal casinos only.

Senate Bill 1194 – A 1% tiered tax increase on igaming revenue

This bill would see a 1% tax rise in gaming revenue across five tiers as follows:

Unlike the sports betting bill, there is nothing in this igaming proposal citing an increase in tax revenue for the cities where the land-based casino partners are located.

The MI tax increase proposals vs other states

To give you an idea of how modest these bills are compared to some other states, let’s take a look at some examples. In Louisiana, a bill proposed to hike taxes from 15% to 51%, but was quickly dropped.

Ohio doubled its sports betting tax rate from 10% to 20% back in 2022 but is now proposing to return to the 10% rate.

Michigan gambling tax rises – The final word

The failure to pass House Bill 22 in Louisiana, and Ohio’s potential return to a lower rate, provide two pointers as to why Senate Bills 1193 and 1194 in MI propose such subtle tax hikes. Anything steeper would more than likely be very difficult to pass.