Michigan Stands to Earn $90 Over Million From Online Gambling and Sports BettingPublished August 15, 2020 by Elana K
The introduction of online gambling and sports betting in Michigan can help the state dig itself out of its expected budget shortfall of millions in the coming year.
Since the onset of COVID-19 and the halt of many major gambling options, Michigan has been trying to fast-track mobile sports betting and casinos and have them operational by the end of this year. Sports betting was legalized in the state in December 2019, so having it up and running by the end of 2020 isn't too unreasonable. Should online gambling and sports betting take off, Michigan is looking at $93.6 million in tax revenue in the first year alone, according to new projections from Michigan Sharp.
Taxes on the industry include an 8.4% tax on gross revenue for both online and retail operators, while Detroit’s commercial casinos will be charged an additional 1.25% city tax. Online casino and poker revenue will have taxes that range from 20-28%, depending on the operator’s revenue.
For comparison’s sake, New Jersey levies a 9.75% tax on land-based sports betting and a 13% tax for online sports betting. Pennsylvania takes a rather large cut of 36% in sports betting taxes while Indiana only takes 9.5%. Clearly, Michigan’s tax rate is within the realm of reason, especially its rates for mobile sports betting.
According to the relatively new gambling regulations, the 26 land-based casinos in the state can apply to the Michigan Gaming Control Board for sports betting and online gaming licenses. With a population of 10 million people, Michigan has the potential to become one of the largest legal online gambling markets in the United States.
Addressing a more immediate need, the introduction of online gambling and sports betting can help Michigan dig itself out of its expected budget shortfall of millions in the coming year. Both New Jersey and Pennsylvania hit record highs in online revenue due to COVID-19, so there’s no reason that Michigan shouldn’t benefit as well.