Spurred by the example of neighbouring Illinois, Michigan Governor Gretchen Whitmer is proposing to embrace a new tax-per-bet regime, with the specific aim of boosting medical welfare in the Great Lakes state.
Releasing her budget yesterday (February 11), governor Whitmer, a Democrat, now serving her second successive term, outlined US$800 million (£585.5m) in new taxes for her state’s 10 million citizens, with US$200 million (£146.38m) coming from the tax-per-bet hike.
The core aim is to stabilize funding of Medicaid, the joint federal-state medical assistance programme for poorer Americans, which has been pressured by central government cut-backs by the Trump administration.
Michigan’s southwestern neighbour, Illinois, was the first U.S. state to adopt so-called pay-per-bet gambling taxes in July last year.
Under the Michigan proposal, sportsbooks would pay US25 cents for each bet on their first 20 million wagers per year – and then US50 cents for every bet thereafter.
It’s estimated that the new tax regime would generate around US$39 million (£28.54m) a year for state coffers.
Killing The Golden Goose
But in dampening news from Illinois, detractors of the novel taxation system claim that it’s had a negative impact because the number of wagers have fallen by around 15 percent, year-over-year — although, paradoxically, as outlined in this iGamingFuture story https://igamingfuture.com/less-is-more-in-illinois-as-new-tax-shifts-betting-paradigm/, the tax take appears to have gone up, not down.
Nevertheless, opposition to the “every bet you make, I’ll be taxing you” playbook is growing.
This month, for example, Illinois Representative Daniel Didech, Chair of the House Gaming Committee, introduced HB5143, which seeks to ditch the tax-per-bet experiment.
And in a further “Don’t Kill The Golden Goose” moment at a recent conference of gaming states, held in the U.S. Caribbean island territory of Puerto Rico, lawmakers were warned that if they over-tax, the tax take will only go down, not up.
“The industry needs to strike a balance,” cautioned Illinois Democrat Representative Jehan Gordon-Booth: “What you think you’re going to get from raising taxes, you’re not going to get.
“This [could] be a problem in budgets for years to come.
“I don’t want to see us destroy the industry.”
