The Michigan iGaming tax is a graduated charge of 20 percent to 28 percent on an operator’s adjusted gross receipts from online casino play. That structure has held since the market went live in January 2021. In 2026, though, the live question is a proposed increase that would lift the top rate to 36 percent. This guide sets out the current tax, the detail of the proposed change, and where that proposal stands after the state budget process.
Key takeaways
- Regulator: Michigan Gaming Control Board (MGCB)
- Current internet gaming tax: graduated 20 percent to 28 percent of adjusted gross receipts
- City of Detroit adds a 1.25 percent municipal services fee for its commercial casinos
- Internet sports betting tax: 8.4 percent of adjusted gross receipts
- Proposed FY2027 change: a 36 percent top rate on iGaming receipts above 185 million USD, not enacted as of August 2026
- Tax is due monthly, by the tenth day of the following month
How the Michigan iGaming tax works today
The Michigan iGaming tax applies to adjusted gross receipts, which are gross receipts after eligible promotional deductions. The Michigan Gaming Control Board collects it on a graduated scale. Because the scale is graduated, a larger operator pays a higher marginal rate than a smaller one. The bands run from 20 percent to 28 percent, and they apply to every holder of a Michigan iGaming licence.
| Adjusted gross receipts | Tax rate |
|---|---|
| Under 4 million USD | 20% |
| 4 million to under 8 million USD | 22% |
| 8 million to under 10 million USD | 24% |
| 10 million to under 12 million USD | 26% |
| 12 million USD and above | 28% |
Detroit’s commercial casinos also pay a 1.25 percent municipal services fee to the City of Detroit on their internet gaming receipts. Online sports betting sits on a separate, flat 8.4 percent rate. Statute sets the tax bands, so they do not change by negotiation. You can read them in the internet gaming tax law. The tax is only one line in the full Michigan iGaming licence cost.
The proposed Michigan iGaming tax increase
Governor Gretchen Whitmer’s fiscal year 2027 executive budget proposed a higher top rate. Under the plan, receipts above 185 million USD a year would carry a 36 percent charge. Today the top rate is 28 percent. Receipts below that threshold would stay on the existing 20 percent to 28 percent scale. So the change would fall only on the largest operators in the state.
The state estimated the Michigan iGaming tax change would raise about 136 million USD a year. It formed part of a wider tax package worth roughly 800 million USD. Only a few Michigan brands report more than 185 million USD in annual receipts. So the higher rate would concentrate at the top of the market.
The proposed per-bet sports betting fee
The same budget targeted online sports betting through a per-wager fee rather than a rate rise. Operators would pay 25 cents on each of the first 20 million bets in a year, then 50 cents on every wager after that. This charge would sit on top of the current 8.4 percent tax on sports betting adjusted gross receipts.
A flat per-bet fee works differently from a revenue tax. It applies to the volume of wagers, not the margin, so it bites hardest on low-hold products and heavy promotional play. For a company that runs both a sportsbook and an online casino, the two proposals would raise costs on separate parts of the business.
Removing the promotional play deduction
A third element would change how the taxable base is worked out. Today, Michigan lets operators deduct some promotional play before tax. Michigan caps that allowance at 10 percent of receipts for the first three years. It then falls to 6 percent in year four, 4 percent in year five, and nothing after that.
The budget proposed ending the promotional deduction for nearly all operators from 2027, ahead of that taper. That matters because a wider taxable base raises the tax bill even when the headline rate does not move. For newer entrants still inside the deduction window, the effect would arrive sooner than the statute currently sets. The reporting duties behind these figures sit in our overview of the monthly tax reporting rules.
Where the proposed increase stands
As of August 2026, none of these measures is law. The Michigan Senate and House each advanced budgets for the 2026 to 2027 fiscal year without the gambling tax rise. The Senate passed an 88.1 billion USD budget that dropped the governor’s proposed new taxes, including the internet gaming increase.
Republican leaders in the House have said they do not support the increase, so its path forward is uncertain. Proposals like this can return in a later budget cycle, though, so operators should track it rather than treat the current rate as fixed. For now, the Michigan iGaming tax stays on the graduated 20 percent to 28 percent scale.
What a higher rate would mean for operators
The three measures target different operators. A 36 percent band would reach only the largest online casino brands. A per-bet fee would fall on high-volume sportsbooks. Ending the promotional deduction, by contrast, would touch nearly everyone, because it widens the taxable base across the market.
For a large operator, an eight point rise on receipts above 185 million USD cuts directly into margin on the top slice of revenue. Michigan taxes the adjusted figure, not gross, so the deduction change compounds it. Any company planning entry should model both the current rate and the proposed one against forecast receipts. Our revenue reporting and audit team runs those numbers before an application. Our gaming licensing compliance team then manages the monthly filings once a licence is live.
How commercial and tribal operators are taxed
Michigan splits its internet gaming market between three Detroit commercial casinos and twelve federally recognised tribes. The commercial casinos pay the graduated state tax plus the 1.25 percent municipal fee to the City of Detroit. Tribal operators run under tribal-state compacts. So they sit outside that municipal fee, and instead make agreed payments to governing bodies.
Both routes still remit the state internet gaming tax on adjusted gross receipts, as the MGCB sets out in its wagering tax information. A licence covers players who are physically inside Michigan and no one else, because each US state runs its own regulator. Operators weighing several markets often compare the New Jersey iGaming market and the Pennsylvania iGaming licence, since each state sets its own rate and base. Where the money lands inside Michigan is set out in our guide to where Michigan iGaming tax revenue goes.
Planning around the Michigan tax proposal
The current internet gaming tax remains 20 percent to 28 percent on adjusted gross receipts. The proposed 36 percent band is not law as of August 2026. Any operator building a Michigan model should run it against both the current scale and the proposed one, then track the next budget cycle. To pressure-test your entry against both scenarios, contact DD Consultus at contact@licencegaming.com or +356 99408536 for a consultation.
Frequently asked questions
What is the iGaming tax rate in Michigan?
Michigan taxes internet gaming on a graduated scale from 20 percent to 28 percent of adjusted gross receipts. The rate rises with the size of an operator’s receipts, reaching 28 percent above 12 million USD. Detroit commercial casinos also pay a 1.25 percent municipal services fee to the City of Detroit.
Is Michigan raising its iGaming tax?
Not yet. The fiscal year 2027 executive budget proposed a higher top rate, but the Michigan Senate and House both advanced budgets without it. As of August 2026 the increase is a proposal, not law.
What is the proposed Michigan iGaming tax rate?
The proposal would tax internet gaming adjusted gross receipts above 185 million USD a year at 36 percent, up from 28 percent. Receipts below that threshold would stay on the current 20 percent to 28 percent scale. The state estimated the measure would raise about 136 million USD a year.
Has the Michigan gambling tax increase passed?
No. Both chambers of the Michigan legislature passed fiscal year 2026 to 2027 budgets that dropped the governor’s proposed gambling tax rise. House leaders have said they do not support it, so its future depends on a later budget cycle.
How is Michigan online casino tax calculated?
The tax applies to adjusted gross receipts, which are gross receipts after eligible promotional deductions. That promotional allowance tapers from 10 percent in the first three years down to nothing after year five. The state then applies the graduated Michigan iGaming tax, from 20 percent to 28 percent, to the adjusted figure.
What is the tax on online sports betting in Michigan?
Online sports betting is taxed at a flat 8.4 percent of adjusted gross receipts, separate from the graduated iGaming rate. The fiscal year 2027 budget also proposed a per-bet fee of 25 cents on the first 20 million wagers and 50 cents after that. That per-bet fee has not been enacted.
Do tribal operators pay the same iGaming tax?
Tribal operators remit the state internet gaming tax on adjusted gross receipts through the Michigan Gaming Control Board. They run under tribal-state compacts, so they sit outside the 1.25 percent City of Detroit municipal fee. Instead, they make agreed payments to governing bodies.
When is the Michigan iGaming tax due?
Operators remit internet gaming tax to the state monthly, by the tenth day of the following month. That means the tax is a continuous cost rather than an annual one. Cash-flow planning matters from the first month of operation.