The Michigan Legislature and Gov. Gretchen Whitmer (pictured) are inching closer to a deal to legalize sports betting and online gambling on the territory of the state, with final votes on the matter expected to take place this week.
Michigan already offers several gambling options, including three commercial casinos in Detroit, 24 tribal casinos around the state, and the state-run Lottery that also offers online products.
Gov. Whitmer has expressed concerns that the addition of new gambling options could create a “substitution effect” that could see people playing online lottery switch to poker and other Internet games, and this would affect lottery tax revenues as new online gambling products begin to gain more and more popularity.
For a net win of $1,000 from online lottery products, Michigan schools get $700. However, under the proposed online gambling legalization bills, online casino and poker products would be taxed at 19%, and less than half of that would go to schools. This means that for a $1,000 net win from online gambling, schools would get about $81.
Lawmakers and Gov. Whitmer have been at odds over how much sports betting should be taxed at. The House proposed an 8.75% rate on sports betting revenue and letting Detroit collect an additional 3.25%. Gov. Whitmer has suggested taxing bets at 10%, 11%, or 12%, depending on the extent to which the state would allow casinos to offer online poker and table games.
The gambling expansion bills under discussion also provide for the regulation and taxation of daily fantasy sports.
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