Michigan Gambling Laws and Taxes
Michigan is one of the most progressive states in the country when it comes to regulated gambling. Since legalizing online casinos, sports betting, and online poker in 2019, the Great Lakes State has built a thriving, tightly regulated market that generated nearly $4 billion in gross receipts in 2025 alone. Here’s what you need to know about how Michigan gambling laws work, who oversees them, and how the money flows.
How Michigan legalized online gambling
In December 2019, Michigan Gov. Gretchen Whitmer signed a series of bills into law that expanded gambling options in the Great Lakes State. The gaming expansion came to fruition after a years-long legislative struggle, marked by many stops and starts, greatly expanding the legal online options. Other long-standing gambling activities, such as online horse racing betting and fantasy sports, were brought under the regulatory umbrella for the first time, too.
It was a long process, with many ups and downs, including a veto. The added complication of tribal gaming in the state proved to be another uphill battle. However, the result changed the course of gaming in Michigan. The Lawful Internet Gaming Act and the Lawful Sports Betting Act were the two most influential laws established in the process. We examine the details of both laws, including taxation, rules of play, and the intersection of tribal casinos.
Michigan online gambling law
The Lawful Internet Gaming Act is officially Act 152 of 2019. It was introduced as House Bill 4311 by Rep. Brandt Iden in March 2019. It reached both House committees that month.
The 13-page document declares that “it is in the best interest of this state and its citizens to regulate this activity by establishing a secure, responsible, fair and legal system of internet gaming.” The legislation legalized online casinos and real money poker sites in Michigan.
The act allows for each casino operator in the state to offer internet gaming under two separate brands. One brand is for interactive poker, and another brand is for casino-style games. Alternatively, a single brand can offer both poker and casino games. Each federally recognized tribe can also offer casino games and online poker. The online gambling market could mature to 30 total sites.
The Michigan Gaming Control Board oversees all online gambling, including that operated by the tribal casinos. However, Native American tribes are sovereign nations. Thus, Michigan does not have general regulatory authority over them. The National Indian Gaming Commission and the governing tribes regulate tribal casinos. The state does have oversight on compliance with the Tribal-State Compact provisions.
Online gambling rules dictate which casino games are offered. The law establishes a minimum baseline for poker, blackjack, cards, slots, and other games typically offered at a casino. It excludes pick numbers or other games typically offered by the Bureau of Lottery.
However, the act does not prohibit the sale of internet lottery games, including digital representations of lottery games.
Key elements of the Michigan online gambling law
- Internet gaming operator licenses are valid for 5 years and renewable for 5 years thereafter.
- Internet gaming was not to be offered until at least one operator was licensed with a tribal casino and another was licensed with a commercial casino.
- Casinos must maintain Michigan Class III gaming status and retain at least 50% of the gaming positions in place at the time the law was enacted.
- Internet gaming operators are required to demonstrate one or more mechanisms to detect age verification (21+), geolocation, and ensure that individuals are not in the Michigan Gaming Control Board’s (MGCB) responsible gaming database.
- The internet gaming operator’s license must be clearly displayed on the platform.
- Monthly reports from operators must be categorized as internet slots, poker, and table games. Other categories include total wagers, payouts, bonus play redeemed, deductions, and adjusted gross receipts.
- The Michigan online gambling age is 21+
Michigan Internet gambling taxes
Some of the most important provisions of the online gambling law address taxes and accounting.
For example, in the first three years of operation, operators cannot deduct more than 10% of gross receipts as “bonus play” to determine adjusted gross receipts. That percentage drops significantly in the fourth and fifth years to 6% and 4%, respectively.
No bonus play deduction is permitted after the 5th year. “Year” is defined as a calendar year beginning Jan. 1. The application fee for an internet gaming operator license is $50,000. If the application is accepted, the initial license fee is $100,000, followed by an annual license fee of $50,000.
Internet gaming supplier pays an initial license fee of $5,000, renewable for $2,500 each following year.
Operators pay a graduated tax rate based on adjusted gross receipts (AGR) each calendar year:
- Less than $4 million: 20%
- $4 million to less than $8 million: 22%
- $8 million to less than $10 million: 24%
- $10 million to less than $12 million: 26%
- $12 million or more: 28%
Taxes are paid monthly by the 10th of the following month.
Detroit online gambling taxes
Taxes from operators linked to Detroit casinos are proportioned as follows:
- 30% to Detroit services, such as street patrol officers; neighborhood development programs with a focus on job creation; public safety programs, such as emergency medical services, fire department programs, and street lighting; anti-gang and youth development programs; quality of life programs; taxpayer relief from one or more taxes or fees imposed by the city; capital improvements; or road repairs and improvements.
- 65% to the Internet gaming fund
- 5% to the Michigan agriculture equine industry development fund, up to $3 million.
Of note, Detroit receives a guaranteed $183 million in annual funds from online gaming.
The Internet gaming fund
The Internet gaming fund was created with revenue from online gaming taxes. The fund is placed in the state treasury and covers:
- MGCB costs of regulating and enforcing internet gaming.
- $500,000 annually to the compulsive gambling prevention fund.
- $2 million annually to the first-responder presumed-coverage fund.
- All remaining money to the state school aid fund.
Michigan sports betting law
Most sports wagering laws are similar to those for online gaming. The Lawful Sports Betting Act, House Bill 4916, was introduced in Sep. 2019 by Iden. After advancing through House and Senate committees and the full legislature, the bill was signed by Whitmer in Dec. 2019.
The 14-page document put Michigan sports wagering into the legal spotlight and includes internet betting. The three commercial casinos in Detroit opened retail sports wagering sites in March 2020. Tribal casinos were already legal through the National Indian Gaming Association. However, most tribal casinos in Michigan did not begin offering sports wagering until the summer of 2020.
Only one internet brand is allowed per casino operator. A casino operator must clearly display its own brand on the platform. Tribal casino operators receive one sports license per tribe as opposed to one license for each tribal casino.
For the purposes of betting, the law states that an ‘athletic event’ does not include:
- Pari-mutuel horse racing
- Events with participants at the high school level or below, unless the majority of participants are 18 or older
- Casino-style games
- Fantasy contests
The retail sports wagering rules cover only the three Detroit casinos. Native American tribes are responsible for maintaining and monitoring sports wagering at tribal casinos. However, because online sports betting is statewide, it falls under the MGCB’s jurisdiction.
Key elements of the sports wagering law in Michigan
- The act does not cover sports wagering that is conducted on “Indian lands” in accordance with a tribal gaming ordinance approved by the chair of the National Indian Gaming Association.
- The act prohibits making sports wagering devices available in a place of public accommodation, including a club or other association.
- Sports platforms are required to demonstrate one or more mechanisms to verify age (21+), geolocation, and ensure that individuals are not on the MGCB’s responsible gaming database.
- Casinos must maintain Michigan Class III gaming status and retain at least 50% of the gaming positions in place at the time the act was enacted.
- US sports leagues can request the use of official league data for sports wagering operators.
Michigan sports wagering taxes
The initial application fee for an operator license is $50,000. The initial license fee is $100,000, and the annual license fee is $50,000. A supplier pays an initial license fee of $5,000, renewable for $2,500 annually.
The tax rate for adjusted gross sports wagering receipts is 8.4%. The three Detroit casinos pay an additional 1.25% city tax.
Detroit sports wagering taxes
- 30% to Detroit services, such as street patrol officers; neighborhood development programs with a focus on job creation; public safety programs such as emergency medical services, fire department programs, and street lighting; anti-gang and youth development programs; quality of life programs; taxpayer relief from one or more taxes or fees imposed by the city; capital improvements; or road repairs and improvements.
- 65% of the Internet Sports Betting Fund
- 5% to the Michigan agriculture equine industry development fund, up to $3 million
Taxes are paid monthly by the 10th day of the following month.
What is the Internet Sports Betting Fund?
The Internet Sports Betting Fund is created in the state treasury from online sports wagering tax revenue.
The fund covers:
- MGCB costs of regulating and enforcing internet gaming
- $500,000 annually to the compulsive gambling prevention fund
- $2 million annually to the first responder presumed coverage fund
- All remaining money to the state school aid fund
Where Michigan online gambling tax revenue goes
The expansion of online gaming and sports betting came with provisions that the additional revenue would help support public entities. When Whitmer signed the bills in Dec. 2019, the estimated annual revenue was $19 million.
This figure came from a legislative analysis from the House Fiscal Agency. The forecast included $7.7 million in tax revenue in the beginning, increasing to $12.1 million. The same group projected about $11.7 million in initial online gaming tax revenue, maturing to as much as $52.5 million.
The Office of Administrative Hearings and Rules issued impact statements that anticipated $25 million in new revenue annually at the launch of online gambling; $18 million for internet gaming, and $7 million for sports. At the time, Iden told PlayMichigan that he estimated that $30 million was reasonable for Year 1, but that the market could mature to $80-$110 million of new tax revenue by Year 2.
The market has grown far beyond early projections. In 2024, Michigan commercial and tribal operators reported a combined $2.9 billion in total iGaming and sports wagering gross receipts, with casino games online alone generating $2.4 billion, a 27% increase over the year before. That figure climbed further in 2025, topping $3.8 billion combined. On the tax side, gaming generated more than $500 million for the state’s School Aid Fund in 2024, with the vast majority coming from taxes.
You can see the latest regarding how much revenue and taxes the state has collected on our Michigan Gambling Revenue page.
Tribal casinos and online gambling in Michigan
Michigan has 12 federally recognized Native American tribes. All of them operate at least one casino. Each tribe is a casino operator, rather than each casino being an operator. Each operator can partner with an online platform and can issue up to three licenses, one each for casino, sports, and poker.
Much of the legislative process in the years following the passage of the 2019 gaming bills focused on the relationship among the Michigan state government, the tribes, and the Detroit commercial casinos.
Since the tribes can offer online gambling statewide, both laws require them to waive sovereign immunity for certain administrative purposes. This gave the MGCB and the Ingham County Circuit Court oversight over some aspects of tribal gaming.
The tribes pay 2% of their net winnings to the state government or local revenue-sharing boards. In addition, some tribes make payments to the Michigan Strategic Fund (MSF) and Michigan Economic Development Corporation (MEDC). Payments to these entities range from 1% to 12%.
In 2022, the tribes remitted a total of $30.8 million in taxes to the state and $52.8 million to the MSF and MEDC.
Michigan bans sweepstakes and social casinos
Michigan has taken a firm stance against sweepstakes and social casinos. These are platforms that use virtual currencies rather than real money but allow players to redeem winnings for cash prizes. In late 2023, major operators, including Chumba Casino and LuckyLand Slots, began exiting the state amid regulatory pressure. By early 2024, the Michigan Gaming Control Board formalized its position by issuing cease-and-desist letters to several remaining operators.
The MGCB determined that the sweepstakes model constitutes gaming under Michigan law, regardless of the virtual currency structure. As of 2024, no sweepstakes casino platform legally operates in Michigan, and full enforcement is expected by mid-2025. Pure social casinos — platforms offering free play with no cash prizes — remain legal.
Michigan online gambling timeline
- 1996: Michigan voters approve Proposal E, authorizing the construction and operation of three commercial casinos in Detroit.
- 2017: Rep. Brandt Iden successfully pushes online gaming bills through the committee process.
- 2018: Iden’s bills reach then-Gov. Rick Snyder’s desk. The bills are vetoed.
- 2019: Michigan lawmakers pass a package of bills legalizing multiple forms of online gambling. Gov. Gretchen Whitmer signs the bills into law
- 2020: Retail and tribal sportsbooks launch.
- 2021: The first casino, sports, and poker sites go live.
- 2022: Michigan joins the Multi-State Internet Gaming Agreement, linking its online poker player pool with those of Delaware, Nevada, and New Jersey.
- 2024: The Michigan Gaming Control Board issues cease-and-desist letters to sweepstakes casino operators, effectively banning the sweepstakes model in the state. No sweepstakes platform legally operates in Michigan following the crackdown.
Michigan gambling laws: The bottom line
Michigan has built one of the most comprehensive and closely regulated online gambling markets in the United States, generating billions in revenue and hundreds of millions in annual tax dollars for public education and other state programs. The regulatory landscape continues to evolve, most recently with the crackdown on sweepstakes and social casino platforms. Whether you’re a player, an operator, or simply a curious observer, staying current with Michigan gambling laws is the best way to navigate this fast-moving space.
