Michigan Gov. Gretchen Whitmer is eyeing an Illinois-style per-bet tax of her own.
- Michigan Gov. Gretchen Whitmer proposed a per-bet sports wagering tax similar to Illinois, charging operators 25 cents for the first 20 million bets and 50 cents for each additional wager.
- The tax is projected to raise $38.8 million for the Medicaid Benefits Trust Fund, though Illinois saw a decline in total bets and added costs for bettors after adopting a similar policy.
- Whitmer’s budget also includes eliminating free bet deductions and raising taxes on higher-earning online casinos, measures expected to generate new revenue but likely face industry opposition.
Whitmer’s proposed budget for the state’s 2027 fiscal year was unveiled Wednesday, and it includes a per-bet tax for Michigan sports betting operators.
According to budget documents, the new tax would be identical to Illinois' sports betting levy that was implemented last year. A 25-cent tax would be applied to a licensee's first 20 million wagers in a year, and then 50 cents for every bet over that level.
Whitmer’s budget forecasts that her state’s per-bet tax could generate $38.8 million for the fiscal year, which would go to the state’s Medicaid Benefits Trust Fund.
“The same tax was enacted in Illinois last year,” budget briefing papers say. “Michigan’s sports betting tax rate currently ranks 28th out of the 30 states that have legalized the activity. Michigan’s tax rate remains the lowest among neighboring states.”
The proposal would likely raise revenue for the state, but it may have consequences for bettors. In Illinois, the per-bet tax that was brought in last year prompted operators to adopt measures to offset the added costs, including transaction fees and higher wagering minimums.
Moreover, Illinois sports betting figures show the number of bets has declined following the implementation of the new tax.
One major industry group, the Sports Betting Alliance, has attributed the falloff to the per-bet levy.
Oh boy. Michigan Gov. Gretchen Whitmer's latest budget proposes to pull an Illinois and add a per-bet sports betting tax.
— Geoff Zochodne (@GeoffZochodne) February 11, 2026
It would be exactly the same as Illinois, too: 25 cents per-bet on first 20M wagers, then 50 cents a bet after that.
h/t @MattCareyGC pic.twitter.com/JqKAXm3mqp
Whitmer’s budget proposes additional tax changes for online gambling in Michigan as well. The governor is now seeking to eliminate the deduction of free bets from the taxable revenue of operators, which is projected to raise another $21.1 million.
“Free play is an incentive for gamblers, allowing them to begin placing sports wagers at no initial cost,” the papers say. “Under the budget proposal, sports betting providers would no longer be able to deduct those wagers.”
Moreover, the budget proposal includes a new “higher marginal tax rate” for online casinos. For an operator that earns more than $185 million in adjusted gross receipts, the tax rate would increase by eight percentage points on revenue above that level, to 36%.
“Last year, only three of Michigan’s internet casinos met the threshold for the higher tax rate to apply,” the papers say. “It is forecast to generate $135.5 million in new tax revenue in FY27, with the majority going directly to the Medicaid Benefits Trust Fund in support of health and wellness programs.”
It seems very likely that Whitmer's proposed tax hikes will be met with resistance from the gambling industry. The proposals also have a ways to go before they are law of the land; it's possible they don't make it into the final budget.
