Michigan State Tax Revenue Closing in on $90M after Six Months of Online Gambling
It was six months ago that Michigan’s online gambling and sports betting sectors went live. This led to multiple online sites providing their services to the state’s residents, and as a result, almost $90 million in tax revenue has been reported six months later.
Even though Governor Gretchen Whitmer signed the necessary legislation back in December of 2019, the industry didn’t become active in the state until January of 2021. Prior to this, there were initial estimates stating that Michigan could bring somewhere between $10 million and $50 million in annual tax revenue. However, focusing on numbers for the period of January through to June 2021, the state has smashed beyond those predicted estimates, raising $87.8 million in state tax revenue.
On top of that revenue, local and tribal revenues added $34.7 million, which has led to the predictions clearly being crushed.
Over the course of the first six months of the year, online casinos and sportsbooks have taken around $483.1 million. The online sports betting scene in Michigan has a tax rate of 8.4% applied to it, whereas online casino play has a tax scale. This has a spectrum of 20% to 28%. With this in mind, it has been suggested that there is the potential for revenue to reach $200 million annually.
“Sports betting has been about what we expected, but online casino certainly has been a lot bigger than what people expected. I think the growth is going to be coming in the sports betting…I think that there’s a little bit of industry belief that maybe the online casino numbers have already plateaued a little bit”, said analyst Matt Schoch. He went on to state that the horse racing industry in Michigan will receive a little of the tax money taken, while a prevention fund for firefighters who have been afflicted with a certain type of cancer is also a recipient.
However, the majority of the tax revenue is put towards the school fund aid of the state. A large chunk is also handed out to the gambling addiction fund set up in Michigan by the Department of Health and Human Services.