Michigan’s Senate Bills 1193 and 1194 have failed to advance in 2024, meaning the state’s gambling tax structure will remain the same for now. These measures aimed to slightly increase taxes to generate additional funds for various causes.
Details of Senate Bill 1193
Introduced by Senators Sam Singh and Jeremy Moss, SB 1193 proposed minor changes to both gambling tax rates and the allocation of tax revenue. Specifically, the bill sought to increase the sports betting tax by 0.1%, raising it to 8.5%. This slight increase was not expected to significantly impact gambling companies.
The bill also proposed changes to the online casino gaming tax, which is currently based on operators’ annual revenues:
- Less than $4 million: 20%
- $4-8 million: 22%
- $8-10 million: 24%
- $10-12 million: 26%
- $12 million or more: 28%
SB 1193 aimed to increase the tax rate for each of these tiers by 1%.
Details of Senate Bill 1194
SB 1194 sought to modify the allocation of tax revenue. Currently, 65% of the taxes go to the Internet Gaming Fund, 30% to services in Detroit, and 5% to the agriculture equine industry development fund. The proposed changes would have adjusted these allocations to 63.5% for the Internet Gaming Fund, 31% for Detroit services, and 5.5% for the agriculture equine industry.
Outcome and Future Implications
Despite the modest nature of these tax adjustments, the bills did not gain enough support and failed to progress. Consequently, the proposals will not carry over into 2025. However, proponents of the measures may reintroduce them in the future.
For now, Michigan remains one of the most favorable states for gambling operators in terms of tax rates. The state not only maintains low tax rates but also allows sportsbooks to deduct promotional spending from their taxable revenue, creating a very operator-friendly environment.
Michigan Warned About Scams
A month ago, the Michigan Lottery issued a warning about potential scams, especially around the holiday season. They reminded players that winning prizes requires purchasing a ticket and that claiming prizes is free, with the only requirement being to present a winning ticket.
This situation emphasizes the importance of vigilance among players and the ongoing efforts by state authorities to protect consumers from fraudulent activities.
