Senate Bills 1193 and 1194 expired on January 1, 2025, ending unsuccessful attempts to amend Michigan’s gambling tax legislation. The measures, which were introduced by Senators Jeremy Moss and Sam Singh, called for small tax increases on internet casino operators and sports bettors, but nothing was done about them before the legislative session ended.
Proposed Changes That Didn’t Advance
The legislation sought modest adjustments, including increasing the sports betting tax rate from 8.4% to 8.5%. It also proposed reallocating tax revenues. Currently, 65% of gambling tax revenue supports the Internet Gaming Fund, 30% goes to Detroit services, and 5% funds the Michigan Agriculture Equine Industry Development Fund, capped at $3 million.
The bills suggested reducing the Internet Gaming Fund’s share to 63.5%, raising Detroit’s allocation to 31%, and increasing the agriculture fund’s cap to 5.5%. For online casinos, tax rates would have increased by one percentage point across all revenue brackets. Operators making less than $4 million annually would face a 21% tax rate, up from 20%, while those earning $12 million or more would see a rise from 28% to 29%.
Legislators failed to move the bills forward in spite of these modest ideas, therefore Michigan’s present gambling tax structure remained unaltered. When it comes to gambling taxation, Michigan is already regarded as one of the most operator-friendly states.
For instance, sports betting companies can reduce their lifetime tax rate to 5.0% and to 4.7% for 2024 by deducting promotional expenditures from taxable income. Similar advantages apply to online casinos, where promotional deductions of up to 10% of gross income are allowed. However, under present legislation, this will drop to 6% in 2025.
Even though the planned modifications would have resulted in a minor increase in tax payments, the legislation’ expiration guarantees that Michigan will continue to be a welcoming state for casino operations. It will be necessary to reintroduce any future attempts to change the tax structure in 2025.
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