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Michigan online casinos push back against governor's gambling tax plan
Gov. Gretchen Whitmer has proposed increasing taxes on Michigan online casinos and sportsbooks, but operators are urging lawmakers to reject the plan.
Michigan is facing a budget gap of nearly $2 billion, partly due to the federal government providing less funding for Medicaid and other health programs in the state. But Governor Gretchen Whitmer believes she has found a way to help generate extra money to pay for those programs, which involves increasing taxes on Michigan online casinos and sportsbooks. Naturally, though, licensed operators in the state are pushing back and calling for legislators to reject the idea.
Governor proposes tax hike on Michigan online casinos
In a state budget office briefing paper, Whitmer proposed raising taxes on the largest Michigan online casinos – those that generate over $185 million in adjusted gross receipts each year – from 28% to 36%. That spike would mostly affect platforms like the BetMGM Casino app as well as the likes of DraftKings Casino and FanDuel Casino.
According to the governor, changes like that, as well as an extra charge on sportsbooks per bet and eliminating promotional deductions, could generate over $195 million for the 2027 state budget. Michigan is one state where you'll find instant withdrawal casinos that drive plenty of revenue.
All of that would go toward the state's Medicaid Benefits Trust Fund as Whitmer looks to find long-term sustainability for health and wellness programs that cover the majority of Michigan residents. She has also pitched raising taxes on cigarettes and other tobacco products while also instituting taxes on vapes and digital advertising.
Whitmer, though, faces an uphill battle to have her plan approved with pushback coming both from legislators and prominent real money online casino platforms.
Advocates: Unregulated operators only ones benefiting from tax hike
One noteworthy opponent of the tax increase is House Speaker Matt Hall, who originally sponsored a bill that led to the launch of online casinos in Michigan in 2021. Hall assured that the state won't be raising taxes on iGaming in the state.
The Sports Betting Alliance – which consists of notable brands like BetMGM, DraftKings, Fanatics and FanDuel – said in a statement that raising taxes will result in higher prices for Michigan residents to play casino games online and make it more difficult for legal operators to compete.
Along those lines, the Sports Betting Alliance said, the only parties that benefit from higher tax rates are illegal and unregulated online casinos.
Michigan stands as the largest legal online casino market in the US, topping $3 billion in revenue last year, resulting in $625 million in state tax revenue. Since launching in 2021, Michigan online casinos have seen revenue more than triple.
