Key Takeaways
•Michigan lawmakers removed Governor Gretchen Whitmer’s proposed 25–50 cent fee on every sports bet from budget bills moving through the legislature.
•The proposed fee would have changed how sports betting is taxed in one of the largest markets in the U.S.
•Budget talks are still ongoing, with lawmakers also considering higher taxes on online casino gaming.
Michigan lawmakers rejected Governor Gretchen Whitmer’s proposed 25–50 cent fee on each sports bet, leaving it out of current budget bills. The move shows strong opposition. As a major betting market, changes matter, and the issue may return. Lawmakers are still considering higher taxes on online casino gaming.
What a Per-Bet Fee Would Have Meant
The proposed fee would have been very different from how sports betting is taxed now. Currently, Michigan taxes sportsbook revenue at 8.4 percent. This revenue is what sportsbooks keep after paying out winners.
Under the new plan, every bet, no matter what size or amount, would include a flat fee. For example, someone placing a $5 bet might effectively pay an extra 5 to 10 percent in costs before other factors are considered.
This type of fee would have hit smaller bets the hardest. It also could have changed how sportsbooks operate. Companies might have reduced promotions, such as bonus bets, to cover the added cost. Some experts said bettors might place fewer bets but make them larger to avoid paying the fee multiple times.
In 2024, Michigan saw more than $11 billion in sports bets. Even a small fee per bet could have brought in hundreds of millions of dollars in tax revenue. Still, sportsbook companies argued it would make Michigan less competitive. Some also warned it could push bettors to offshore sites that don’t charge such fees.
Legislative Priorities and Budget Negotiations
While lawmakers removed the sports betting fee, they are still looking at other ways to raise gaming taxes. One idea is to increase the tax on online casino gaming from 20 percent to as much as 28 percent.
Online casinos make more money than sportsbooks. In 2024, they handled over $4 billion in wagers. Sportsbooks usually keep only about 5 to 10 percent of total bets, while online casinos keep a larger share. Because of this, lawmakers see casino gaming as a better place to raise taxes.
Governor Whitmer included the sports betting fee in her larger plan to increase funding for education. So far, her office has not responded to the legislature’s decision to remove it.
Budget negotiations in Michigan often take weeks or even months. The governor still has the power to veto parts of the budget, which could lead to compromise talks.
Since online betting became legal in 2020, Michigan’s gaming industry has grown quickly. The state collected more than $200 million in gaming taxes in 2024. Both lawmakers and the governor want to increase that number, but they disagree on how to do it.
Industry and Market Implications
Michigan’s decision could influence other states. Large markets like Michigan typically set trends for gaming laws. If the per-bet fee had passed, other states might have tried similar taxes. Now, that seems less likely.
Major companies like FanDuel, DraftKings, and BetMGM operate in Michigan. These companies opposed the fee, saying it would force them to cut back on marketing and promotions. Those promotions regularly give bettors better deals, such as bonus bets or improved odds.
The decision may also affect competition with nearby states like Ohio, Indiana, and Illinois. Each state has different tax rules for sports betting. Michigan’s current rate of 8.4 percent is considered moderate. Some states, like New York, have much higher rates, while others, like Nevada, have lower ones.
As budget talks continue, both bettors and companies will watch closely. The final budget could still include changes that affect sports betting and online casinos.
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