Michigan senators propose increases in sports betting and igaming taxes

Senators in Michigan have tabled legislation that would increase the tax rates for both sports betting and igaming in the state.  

Democratic representatives Sam Singh and Jeremy Moss introduced Senate Bills 1193 and 1194 on December 5, which have now been referred to Michigan’s Committee on Government Operations. 

Senate Bill 1193, which concerns sports betting, proposes a slight increase to the tax rate to 8.5% of adjusted gross sports betting receipts, up from 8.4% previously. 

The legislation also includes changes to how the tax collected from sports betting operators will be redistributed.  

The bill proposes 31% of the tax to be allocated back to the city where the operator’s casino partner is located, up from 30%.  

This money will be earmarked for measures such as neighborhood development programs to create more jobs, anti-gang and youth development initiatives, taxpayer relief, and city improvements. 

A further 63.5% will be deposited into the state fund, down from 65%, while 5.5% will go to the Michigan agriculture equine industry development fund created under section 20 of the state’s horseracing law. 

As for igaming, Senate Bill 1194 proposes a tiered increase in tax rate depending on the adjusted gross gaming revenue (GGR) generated by the operator. 

Operators with less than $4m in GGR would be subjected to a 21% tax rate, up from 20% previously.  

GGR between $4m and $8m would be taxed 23% rather than 22%, while GGR of $8m to $10m would be taxed 25% instead of 24%.  

Furthermore, GGR of $10m to $12m would be subjected to 27% tax rate rather than 26%, and the highest rate of 29% would be reserved for operators generating more than $12m in GGR.  

In terms of allocation to the state, 64.5% of this collected tax would be funneled into Michigan’s state fund, down from 65%.  

As in the sports betting bill, 5.5% rather than 5% will go to the Michigan agriculture equine industry development fund.