Michigan lawmakers have proposed legislation to increase taxes on commercial online gambling and sports betting operations. State Senators Sam Singh and Jeremy Moss introduced Senate Bills 1193 and 1194, which would affect commercial operators in Detroit.

The proposed changes include:

• Sports betting tax increase from 8.4% to 8.5% (both online and retail)
• iGaming tax increases of 1% across all revenue tiers:
  • Under $4M annually: 20% to 21%
  • $4M-$8M: 22% to 23%
  • $8M-$10M: 24% to 25%
  • $10M-$12M: 27% (new tier)
  • Over $12M: 29% (new tier)

These changes would only affect commercial operators in Detroit (MGM Grand Detroit, MotorCity, and Hollywood Casino at Greektown) and their online partners (BetMGM, FanDuel, and ESPN Bet). Tribal gaming operations would maintain their current tax rates.

Current Performance (January-October 2024):

• Commercial iGaming revenue: $1.058 billion
• Tribal iGaming revenue: $913 million
• Commercial online sports betting: $247.4 million
• Tribal online sports betting: $134.6 million

State revenue collection so far in 2024:

• iGaming: $363 million
• Online sports betting: $12.5 million

Commercial operators oppose these increases, arguing they would create a competitive disadvantage against tribal operations. Both bills are currently under review by the Senate Government Operations Committee.

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