In 2018, the US Supreme Court overturned the Professional and Amateur Sports Protection Act, granting states the authority to establish gambling laws for their respective jurisdictions. This landmark decision has led to the legalization of sports betting and casino gaming in more than 33 states in the US, including Michigan.
Below, you’ll get a more detailed overview of how online gaming became legal in Michigan and how the industry is regulated in the state.
Legal Status of Online Gambling in Michigan
Online gambling, including casinos, sports betting, poker rooms, lottery, and fantasy sports, is fully legal in Michigan. In the same year as the ground-breaking Supreme Court decision, lawmakers in Michigan passed a bill that aimed to legalize the operations of online casinos and sportsbooks in the state. Former governor Rick Snyder vetoed the bill. However, in December 2019, Gretchen Whitmer, the new Michigan governor, signed a comprehensive online gambling measure into law.
In the aftermath, retail sportsbooks were open for operation in March 2020, while online markets were fully launched in January 2021. The law allowing the operation of online gaming sites in the state requires that operators partner with an existing retail casino or sportsbook license holder.
Legal Gambling Age Requirement for Michigan
The legal gambling age in Michigan is 21. This means that only players aged 21 years and above will be allowed to open online casino or sportsbook accounts and place wagers. However, several forms of gambling activities may stipulate different minimum age requirements.
For instance, many retail tribal gaming facilities have 18 as the legal age to play casino games. Similarly, a player must be at least 18 years old to participate in the lottery. But for some commercial sportsbooks and Odawa Casino, the minimum age is set at 19.
Taxes on Casino Winnings
Both the state of Michigan and the federal government charge taxes on your winnings from retail and online casinos or sportsbooks. Generally, the IRS considers winnings from any gambling activity to be taxable income.
So, you are liable to pay 24% federal tax on any of your winnings at Michigan online casinos or sportsbooks. At the state level, the tax is levied at 4.25%. However, this payment is usually subject to your household and overall taxable income.
The Michigan state also charges taxes on the revenue of sports betting and casino sites. These taxes are paid to local authorities and used to fund education and several other important state programs like responsible gaming initiatives.
Which Agency Regulates Michigan Casinos?
Both casinos and sportsbooks in the state are regulated by the Michigan Gaming Control Board (MGCB). The MGCB is responsible for issuing licenses to eligible operators. It is also responsible for regulatory oversight over retail and online gambling platform operations, while ensuring fairness across all wagering activities.
Although the MGCB does not have authority over federal tribes, it has a duty to ensure that tribes and their casinos comply with the State-Tribal Compact Provision. The MGCB is also tasked with auditing revenue and promoting the state’s responsible gambling program.