TLDR
- The Michigan Senate passed an $88.1 billion budget but removed Governor Whitmer’s proposed gambling tax increases
- Whitmer wanted a per-bet fee on sportsbooks that would have charged $0.25 to $0.50 per wager, raising an estimated $39 million a year
- She also proposed raising online casino tax rates from 28% to 36% on revenue above $185 million, projected to bring in $136 million annually
- Republican House Speaker Matt Hall rejected tax increases outright, and even Democratic Senator Sarah Anthony called the plan potentially “tone-deaf”
- The Senate voted along party lines to strip the tax provisions, and Whitmer’s office has not said whether she will push the plan during final budget talks
The Michigan Senate approved an $88.1 billion budget last week but left out Governor Gretchen Whitmer’s proposed tax increases on sports betting and online casinos. The move stalls a key part of her revenue strategy.
Whitmer had sought roughly $800 million in new taxes across several industries. The gambling-related proposals made up a large chunk of that figure.
Her plan included a per-bet fee on sportsbooks modeled after a system used in Illinois. The fee would have charged $0.25 on each of the first 20 million wagers placed annually.
After that threshold, every additional bet would have been taxed at $0.50. State officials estimated the per-bet fee alone could raise $39 million per year.
Whitmer also wanted to end promotional deductions used by sportsbooks and online casinos. Analysts said eliminating those deductions would have added another $21 million in annual revenue.
Whitmer’s Online Casino Tax Proposal
For online casinos, the governor proposed an 8-point surcharge on revenue above $185 million. That would have pushed the tax rate from 28% to 36% once a casino crossed that line.
State projections put the expected revenue from that single change at $136 million per year. Combined with the sports betting measures, the gambling tax package was the most detailed part of her broader proposal.
Whitmer said the new revenue was needed to offset what she described as a multibillion-dollar hit from the federal government. She pointed to the One Big Beautiful Bill Act of 2025 signed by President Donald Trump as the cause of the shortfall.
To fill the gap, she bundled the gambling taxes with proposed levies on tobacco, vaping products, and digital advertising. But the package ran into resistance almost immediately.
In February, Republican House Speaker Matt Hall dismissed the idea. He said there would be no tax increases in the final budget deal.
Bipartisan Pushback Against the Plan
Opposition was not limited to Republicans. Democratic Senator Sarah Anthony of Lansing said raising taxes while “people are hurting” could be “tone-deaf.”
Anthony told colleagues she wanted lawmakers to be “mindful of what revenue options are there and whether they’re impacting working families.” Her comments reflected broader concern within the governor’s own party.
The Senate ultimately voted along party lines to strip the gambling tax provisions from its version of the budget. The decision leaves a gap between the Senate plan and the governor’s revenue goals.
The Senate’s $88.1 billion budget is slightly larger than Whitmer’s original $88 billion proposal. But it diverges sharply on how to pay for it.
The budget also differs from the $78 billion package passed by the Republican-led House in April. Negotiators from both chambers now have to resolve those differences before the July 1 deadline.
Missing that deadline carries no legal penalty. However, lawmakers typically aim to finish on time so school districts can set their own budgets with certainty.
Whitmer’s office has not said whether she will attempt to revive the gambling tax plan during final negotiations.
