Michigan Sportsbooks Win as Senate Kills Whitmer’s Per-Wager Tax — What It Means for Bettors in the State

Michigan sports bettors got good news last week when the state Senate approved an $88.1 billion state budget that stripped Gov. Gretchen Whitmer’s proposed per-wager sports betting fee and higher online casino tax rates. The rejection drew support from both parties, with several Democrats joining Republicans in rejecting a plan that would have added new fees to every wager placed at licensed Michigan sportsbooks.

Whitmer’s proposal would have applied a $0.25 per-bet fee to the first 20 million wagers processed annually by each operator, rising to $0.50 per wager beyond that threshold. State projections estimated the fee alone could generate roughly $39 million per year. She also sought to eliminate promotional bet deductions currently available to sportsbooks, which would have cost operators another $21 million annually, and wanted to introduce a higher graduated tax rate on online casino revenue above $185 million per year.

The Illinois Warning Sign

The primary argument against Whitmer’s proposal was that Michigan would repeat Illinois’ experience. After Illinois introduced a similar per-wager tax in 2025, several sportsbooks raised minimum bet thresholds and introduced new surcharges for bettors. Lawmakers worried that if Michigan followed the same path, players would seek out unregulated offshore alternatives, ultimately shrinking the regulated market rather than increasing its tax yield. State Sen. Sarah Anthony told Bridge Michigan after the vote: “We have not contemplated new revenue, particularly those sin taxes the governor has put forward, but we’re open to that conversation.”

What Comes Next

The budget still requires reconciliation with the House version and the governor’s signature. A separate bill proposing a more modest 1% increase to sports betting taxes remains in play. For now, bettors using Michigan sportsbooks or Michigan casino apps will not face any fee structure changes tied to this rejected proposal. The broader national debate about how states should tax sports betting operators continues as Illinois, New York, and now Michigan have each taken different approaches to the question.