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Michigan governor Gretchen Whitmer proposes raising taxes on online casino revenue
Michigan Gov. Gretchen Whitmer's latest budget proposal includes raising the tax rate on the highest thresholds of revenue from legal online casino play.
Michigan Gov. Gretchen Whitmer has presented the state legislature with her budget plan for the 2026-27 fiscal year and it includes elevating tax rates applicable to the revenue of licensed gaming entities. Legal online casinos in the state are part of the plan although Whitmer is only proposing to raise taxes on topline revenue from iGaming.
Whitmer announces plan to hike online casino revenue taxes
The Whitmer budget for FY2026-27 features increases in funding for social services like Medicaid. To account for those increases, Whitmer has included an escalation of the state's privilege fees related to gaming.
Licensed online casinos in Michigan could see the tax rate on their topline revenue increase from 28% to 36% if Whitmer's plan becomes final. State law imposes a graduated tax upon legal casino apps in MI.
That means the more revenue that individual licensees report, the higher the rate they pay. Licensees also only pay the highest rate (currently 28%) on annual revenue at and above $185 million.
In a press conference sharing her budget proposal, Whitmer's staff stated that only three of the nearly 20 Michigan iGaming licensees had revenue qualifying for that top threshold in 2025. Thus, Whitmer's proposal would not have affected the other operators and only represented an escalation for the highest revenue totals for the three licensees that would have been subject to the higher rate.
Whitmer projects raising the top rate to 36% would create an additional $135.5 million for the state to spend. Michigan's coffers are due to get a boost soon from people playing the best odds casino game options either way.
Online casino promo deductions sunsetting in 2027
Whitmer's proposal also features eliminating a deduction for promotional value that online sportsbooks in Michigan award bettors. However, promo deductions for the fastest payout online casino choices in the state are already on their way out.
Michigan set promo deductions for iGaming on a gradual reduction timetable, with the percentage of promotional value declining for operators annually. In 2027, that percentage will fall to 0% and remain there indefinitely.
That means tax revenue from MI online casinos should rise from the 2027-28 fiscal year onward. However, Whitmer's current budget proposal is for FY2026-27 and the increase from the promo deductions completely sunsetting likely will not be on the scale that Whitmer's plan to increase the tax rate would produce.
For players enjoying online casino games for real money in MI, the sunsetting of the promo deductions might result in a small decrease in frequency and/or value of offers from licensed online casinos. Deals like the BetMGM Casino bonus code for new players should continue to be available, though.
Adjustments to Whitmer's proposals in the Michigan legislature could be significant, so these changes are tentative for gaming licensees in the state. An escalation of gaming privilege fees of some kind could be in the cards for 2026.
