Sports betting and online casinos could generate $ 93 million in first-year tax revenue in Michigan, according to projections from MichiganSharp.com.
The first of Michigan’s online sports betting platforms and casinos could be launched by the end of 2020. It sets the stage for Michigan to become one of the largest online gambling states in the United States.
Competitive state tax rates for an online betting hub
Gross income from sports betting, both online and retail, will be taxed at 8.4% by the state. Detroit’s three commercial casinos pay an additional city tax of 1.25%.
Michigan hosts 26 land-based casinos, all of which are expected to offer sports betting and online gaming to the state’s population of 10 million at a time.
“All the pieces are in place for Michigan to become a major hub for online sports betting and gambling,” MichiganSharp.com analyst Geoff Fisk said. “Virtually all state casinos should want a piece of the new market, especially with attractive tax rates.”
By comparison, New Jersey taxes field sports betting at 9.75% and online sports books at 13%. Indiana’s online sports betting fee is 9.5%, while Pennsylvania’s sports betting fees are 36%.
State lawmakers adopted Law 4916 in December 2019, which legalized both sports and online sports betting. The bill also brings online casinos and online poker to the state, setting the stage for Michigan to become one of the largest legal online gambling markets in the United States.
All 26 of Michigan’s retail casinos can apply for sports betting licenses and online gaming licenses through the Michigan Gaming Control Board. In a unique situation for Michigan, the state’s three commercial casinos, as well as the 23 tribal casinos, are eligible to offer online gaming.
Online sports betting has been hugely successful in Pennsylvania and New Jersey. In both states, online betting accounts for more than 80 percent of total sports betting revenue.
First-year revenue projections of $ 650 million, according to MichiganSharp.com
MichiganSharp.com projects that the state could bring up to $ 400 million in total sports betting revenue in the first year, producing $ 33.6 million in tax revenue for the state.
“Mobile betting should be the main revenue engine in the Michigan sports betting market,” Fisk said. “The convenience and ease of access to online sports betting opens up a whole new world of opportunities for both bettors and sports book operators.”
Online casino and poker revenues will be taxed at 20-28% by the state, using a win-dependent tier system. MichiganSharp.com projects that online casinos and poker could earn up to $ 250 million in first-year operations, bringing in potential tax revenues of $ 60 million.
MichiganSharp.com projects that generate total revenue from sports betting, online casinos and online poker could earn $ 650 million in the first year of operations, resulting in $ 93.6 million in tax revenue for the state.
For more analysis and news on the latest developments in the Michigan gambling industry, visit MichiganSharp.com.