Michigan Gov. Gretchen Whitmer (D) pushed lawmakers to enact a per-wager tax on the state’s sports betting industry. But the legislature passed a budget that doesn’t include the levy similar to the Illinois sports betting model.
Whitmer favored a 25- to 50-cent tax on each bet. A higher tax rate on the industry is also still on the table as Michigan reportedly faces a projected budget shortfall of over $1 billion for the upcoming fiscal years (2026-2027).
“We have not contemplated new revenue, particularly those sin taxes the governor has put forward, but we’re open to that conversation,” State Sen. Sarah Anthony (D) said.
“We want to be sure that we’re being mindful of what revenue options are there and whether they’re impacting working families.”
Poor Results For Per-Bet Tax In Illinois
Illinois added a per-wager tax in June that included a 25-cent levy on wagers for an operator’s first 20 million bets and 50 cents for each bet over that. Sportsbooks passed the tax on to customers via transaction fees and raised betting minimums.
The impact was felt immediately, with 28 million fewer bets in the first three months after the tax went into effect. Some lawmakers have now pushed to repeal the tax. The per-bet tax followed a rate increase in 2024 that instituted a progressive tax structure on operators up to 40%.
Whitmer’s proposal in Michigan is part of a slate of “sin taxes” that also includes hikes on tobacco, vapes, and digital advertising. Her office projected more than $190 million generated from the new taxes.
Houses May Be Split On Issue
The state has a July 1 budget deadline. Whether those sin taxes make it into the final budget remains to be seen. While the Democrats control the state Senate, Republicans control the House and may not be amenable to tax increases.
The two bodies both passed budget proposals, but at starkly different levels of spending. The House plan includes a $76 billion budget, while the Senate version reached $88 billion
