Gov. Gretchen Whitmer Signs Law To Allow Michigan Tax Deductions For Betting Losses

Written By Drew Ellis on December 15, 2021 - Last Updated on January 3, 2022
Michigan Gambling Tax Rule December 2021

The Michigan Legislature presented the state’s bettors with a holiday gift last month.

During the lengthy final session day of 2021, the Michigan House of Representatives approved a bill to create a new tax deduction tied to their gambling losses.

It went to the governor’s desk where it was signed in the last week of 2021 by Gov. Gretchen Whitmer on Dec. 27. It will be available for 2021 play, the first year of Michigan online sports betting, online casinos and online poker in the state.

Senate Bill 764 had made it through the Senate Finance Committee and full state Senate in recent weeks. Then, the House approved it 72-30. These developments are likely welcome news for those on the hook for Michigan gambling taxes.

What does this Michigan gambling bill mean for you come tax season?

Proposed by Sen. Curtis Hertel (D-East Lansing), Senate Bill 764 allows Michigan state taxpayers to deduct the same gambling losses claimed on their federal tax return for the 2021 tax period and beyond.

The deduction would offset winnings, similar to what is allowed under federal law.

Hertel believes that the bill helps fix a “weird loophole” that has affected Michigan bettors since the state launched retail sports betting and online sportsbook and casinos over the last two years.

In a report from Gaming Today, Hertel used the example of a Michigan gambler betting $1,000 in the state and winning half of those bets. Currently, they would have to pay taxes on the $500 won, but get no credit for the $500 lost, even though that gambler made no profit.

“That’s wrong. No one should have to pay taxes on money that they never earned or had. And there are many, many Michiganders who will be caught up in this situation, which is really unintentional,” the Senator told the Senate Finance committee earlier this month.

With the new bill, taxpayers wouldn’t be allowed to deduct losses to exceed taxes owed. Write-offs can also only be for losses wagered in Michigan, not other states.

“So, if you bet $2,000 and didn’t win anything, you don’t get to deduct the $2,000 you lost. You have to actually have to have winnings to be able to deduct losses. So, the amount you deduct in losses is only equal to what you actually won,” Hertel said.

According to the Associated Press, the law is expected to cost the state of Michigan $12-17 million in tax revenue.

Photo by Marcio Eugenio/Dreamstime
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Drew Ellis

Drew Ellis is currently the Lead Writer of He was the former Lead Writer of PlayMichigan, the No. 1 source for online gambling news in Michigan. A lifelong resident of the state, Ellis has been working in various forms of media since 1998, including more than a decade in the sports betting industry prior to transitioning into US casino markets in 2020.

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