Michigan Governor Proposes 'Per-Bet' Betting Tax
Key Points
- Sportsbooks would pay $0.25 per wager on the first 20 million bets annually, and $0.50 for each bet above that threshold.
- State budget documents project roughly $38.8 million in annual revenue from the new tax, earmarked for Medicaid funding.
- The plan mirrors a similar per-wager tax that Illinois implemented last year, which has been linked with reduced wagering activity.
- The budget also proposes raising online casino tax rates and eliminating certain deductions for promotional “free play” wagers.
How Michigan Would Change Sports Betting Taxes
Governor Whitmer unveiled her FY 2027 executive budget, which includes multiple changes to Michigan’s gambling tax framework.
Central among these is the introduction of a per-wager fee on sports bets, a departure from Michigan’s long-standing practice of taxing bookmakers based on adjusted gross receipts (AGR). Under the new structure, sportsbooks would owe a specified dollar amount for each bet they take, regardless of whether that wager generates a profit.
The per-bet approach has precedent: Illinois enacted a similar tax last year, charging a flat fee on every wager. In that market, operators responded by adjusting pricing and fees, and state data showed a decline in total bets following implementation.
Michigan’s current sports betting tax rate, based on revenue, ranks near the lower end nationally. Budget analysts argue that a per-wager tax would generate steadier income streams and bring Michigan more in line with neighboring states’ tax burdens.
Why This Matters To Bettors
For Michigan bettors, a per-wager tax changes the economics of every single bet placed - particularly smaller wagers.
Unlike revenue-based taxes, which are calculated after sportsbooks account for wins and losses, a per-bet fee applies whether the operator makes money on that wager or not. That structure increases the cost of handling high-volume, low-margin betting activity - including small recreational bets and certain in-play markets.
If the proposal becomes law, sportsbooks have limited ways to absorb those costs. Based on what happened in Illinois after a similar tax was introduced, likely adjustments could include:
- Higher minimum bet requirements
- Reduced promotional offers and bonus credits
- Slightly less competitive odds
- Possible transaction or processing fees
None of those changes are guaranteed, but they are typical operator responses when fixed costs are added per wager rather than per dollar of revenue.
If similar dynamics occur in Michigan, total handle could shrink even as tax revenue increases - particularly if bettors push back against higher costs.
What Happens Next
The Michigan Legislature must now debate and approve the governor’s budget. Lawmakers may amend or reject parts of the proposal, including the per-bet tax.
Operators and industry groups are likely to lobby against measures they view as harmful to market growth or consumer costs, while fiscal conservatives may press for even broader revenue expansions.
If enacted, Michigan would become one of only a handful of states with volume-based taxation on sports betting, a shift that could influence how other jurisdictions think about gaming taxes in tight fiscal years.
Cole cut his teeth as a sportswriter in Texas, covering everything from Longhorns games to small-town Friday night lights. A lifelong bettor stuck with offshore books for over a decade thanks to Texas' slow path to legalization, he eventually found his way into the world of social sportsbooks - where he uncovered a fast-growing, community of bettors.
Today, he writes for the millions of Americans in states without legal books, helping them explore safe ways to bet without running afoul of the law.
As editor-in-chief, he aims to keep BettingScanner honest, human, and grounded in what bettors actually care about: fairness, fun, and finding your lane - even when the state won’t give you one.
