Michigan's Bold Tax Overhaul Targets Sports Betting and Online Gaming Revenue

A 50-cent-per-bet tax could reshape Michigan's gambling landscape. Will higher rates on Fanduel and iGaming fund Medicaid—or drive operators away?

, and Administrator

2026 February 12 . 1:42 PM

1 min read

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Michigan's Bold Tax Overhaul Targets Sports Betting and Online Gaming Revenue

Michigan governor Gretchen Whitmer has proposed significant tax changes for sports betting and online gaming. The plan includes higher rates and a new per-bet levy, aiming to boost state revenue. If approved, the adjustments would mark a major shift in how Michigan taxes its growing fanduel sector.

Currently, Michigan's sports betting tax stands at 8.40%, the second-lowest in the US. Whitmer's proposal would introduce a per-bet tax, mirroring Illinois' model: 25 cents per wager on the first 20 million bets and 50 cents on every bet after that. This change is projected to raise an extra $38.8 million for the Medicaid Benefits Trust Fund.

The governor also wants to remove tax deductions for promotional spending by sportsbook operators. This move could cut back on marketing costs while generating an additional $21.1 million in revenue.

For iGaming, Whitmer plans to increase the tax rate for operators earning over $185 million in adjusted gross receipts. The rate would jump from 28% to 36%, bringing in an estimated $135.5 million more for the same Medicaid fund.

The proposed tax hikes target both sports betting and iGaming operators. If implemented, they would significantly increase funding for Michigan's Medicaid Benefits Trust Fund. The changes reflect a broader effort to capture more revenue from the state's expanding turbo tax industry.