Michigan Lawmakers Halt Proposed Sports Betting Tax Increase
David Genge Published 13/05/2026
Michigan won't be going ahead with a proposal to increase the state tax on sports betting revenue. The Michigan Senate approved Governor Gretchen Whitmer's 2027 budget minus her proposal to significantly hike the state's take from sports betting revenue. Whitmer had proposed introducing a per-bet tax on all Michigan sportsbook wagers.
Had her proposal been met with acceptance from state lawmakers, the expectations were that it could raise an additional $39 million in annual revenue for Michigan. Whitmer also proposed ending the tax exemption that sportsbooks receive for promotional offers like bonus bets. Projections were that it would have garnered the state an additional $21 million in revenue per year.
Michigan lawmakers approve an $88.1 billion budget minus the increases in sports betting tax
The Democrat-controlled Michigan Senate gave final approval to Gov. Whitmer's $88.1 billion state budget. However, that approval came minus the proposed $800 million in tax increases that were part of the original budget plan. Among the $800 million in tax increases was the plan to add a per-bet tax to all sports wagers placed in Michigan.
Whitmer's proposal would have instituted a 25-cent per-bet tax on the first 20 million bets handled by a Michigan sportsbook. Beyond that plateau, sports betting sites would've been required to pay 50 cents per bet.
Whitmer was facing immediate opposition to her tax increases
As soon as she announced her 2027 budget proposal in February, Whitmer was facing opposition to her plan. Surprisingly, the Democratic Governor was receiving flak from both sides of the aisle.
“We’re not going to do any of that,” Republican House Speaker Matt Hall said during a press conference shortly after Whitmer's budget reveal. “There will be no tax increases in this budget when we do this deal.”
Even Whitmer's own party was accusing her of being tone deaf to the needs of constituents, many of whom are suffering economically.
The Governor planned to use so-called sin taxes on tobacco, digital advertising, sports betting, and casinos to help offset federal funding cuts to programs like Medicaid.
“We have not contemplated new revenue, particularly those sin taxes the governor has put forward, but we’re open to that conversation,” Democrat State Sen. Sarah Anthony, who also chairs the Senate Appropriations Committee, told Bridge Michigan.
“We want to be sure that we’re being mindful of what revenue options are there and whether they’re impacting working families.”
The Sports Betting Alliance, a lobby group that advocates on behalf of sportsbooks FanDuel, DraftKings, BetMGM, Bet365, and Fanatics, also campaigned against the tax increase.
“The average bet in an American legal regulated sportsbook in this country is somewhere between 13 and 20 dollars,” Joe Maloney, President of the Sports Betting Alliance, told M-Live. “Bettors are not overwhelmingly spending more than that. So when you institute these per-wager fees, 25 cents, 50 cents, it ends up being a lot.”
The Michigan plan followed the Illinois model
Neighboring state Illinois instituted a similar sports betting levy on a per-bet basis in 2025. It has proven to be a disaster for the sports betting sites operating in the state.
The state government in Illinois brought forth a 25-cent per-bet tax on the first 20 million bets, increasing to 50 cents per bet thereafter. It has resulted in a sharp decrease in overall sports betting in the state. Sportsbooks in Illinois responded to the tax hike by putting into place a higher minimum bet rate.
State lawmakers in Illinois are now reconsidering the tax increase.
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