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\n Michigan, the 20th US state to legalize sports betting after the overturning of the Professional & Amateur Sports Protection Act in 2018, has emerged as a gambling juggernaut. However, due to sports betting taxes in Michigan, punters don\u2019t get to keep all of their winnings. Here's a comprehensive guide to understanding and navigating these taxes.<\/p>\n\n

\n Hot Topics<\/b> on this page:<\/span>\n
\n \n Best betting sites Michigan<\/span>\n <\/a>\n \n Winning Taxes Overview<\/span>\n <\/a>\n \n How to Report Taxes<\/span>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n\n
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\n
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\n $\"Table$ \n Explore this page with our Table of Contents<\/b><\/span>\n <\/div>\n \n
<\/div>\n
\n $\"Table$ \n <\/div>\n <\/div>\n <\/button>\n
\n \n
\n ON THIS PAGE<\/span>\n <\/div>\n
\n
<\/div>\n
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<\/div>\n
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\n 1<\/span>\n Gambling Winnings Taxes Overview<\/a>\n <\/li>\n
\n 2<\/span>\n Michigan Sports Betting Taxes in Numbers<\/a>\n <\/li>\n
\n 3<\/span>\n Lottery Winnings<\/a>\n <\/li>\n
\n 4<\/span>\n The Purpose of Michigan Sports Betting Taxes<\/a>\n <\/li>\n
\n 5<\/span>\n How To Report Taxes on Sports Betting Michigan<\/a>\n <\/li>\n
\n 6<\/span>\n Michigan Sports Betting Taxes<\/a>\n <\/li>\n
\n 7<\/span>\n ThePuntersPage Final Say<\/a>\n <\/li>\n
\n 8<\/span>\n Resources<\/a>\n <\/li>\n
\n 9<\/span>\n FAQs<\/a>\n <\/li>\n <\/ol>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n
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\n ON THIS PAGE<\/a>\n <\/div>\n<\/div>\n
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<\/h2>\n\n
Gambling Winnings Taxes Overview<\/h2>\n \n\n
\n Michigan sports bettors must pay taxes on winnings from bets placed at both land-based and online Michigan sportsbooks<\/a> or casinos. All winnings are taxable income, with taxes determined by the amount won. However, only winnings are taxed<\/strong>, not your stake.<\/p>\n\n
\n For instance, if you place a $10 bet and win $30, just the $20 winnings are taxable. Great Lakes Stakes boasts a free \u2018gaming tax calculator<\/strong>\u2019, which you can use to estimate how much you\u2019ll be taxed.<\/p>\n\n
\n <\/p>\n\n
\n <\/p>\n\n
Michigan Sports Betting Taxes in Numbers<\/h2>\n \n\n
\n Despite being a relatively late entrant to the legalization of internet sports betting, Michigan has become a gambling powerhouse, generating a huge amount of funds via taxation. Initially projected to yield $19 million in annual tax revenue, as of August 2023, the state has amassed just under $1bn in lifetime tax revenue.<\/p>\n\n
\n Approximately $30m has been generated every month in state taxes<\/a>.<\/p>\n\n
\n Should I Pay Taxes on Land-Based Betting?\n <\/h3>\n \n\n
\n Land-based casino and online sports betting winnings are subject to Michigan\u2019s flat income tax rate of 4.25%<\/strong>. This is applied to your net winnings only<\/strong>, meaning your total amount won minus any noted losses incurred during the tax year in question. You\u2019re responsible for maintaining a precise record of your wins and losses at land-based casinos for your tax reports.<\/p>\n\n
\n <\/p>\n\n
\n It\u2019s the casino\u2019s responsibility to issue a W-2G tax form to those who win $600 or more, and at least 300 times the wager amount \u2014 which indicates the winnings and any federal taxes withheld.<\/p>\n\n
\n Moreover, there are also federal income tax rates (dependent on an individual\u2019s total income and tax bracket) to consider. These differ from Michigan\u2019s state tax, which are imposed on winnings. Casinos are required to withhold 24% of your winnings for federal tax, but only if you win more than $5,000 and the winnings are at least 300 times the wager.<\/p>\n\n
\n Online Casino Betting: Taxable Income\n <\/h3>\n \n\n
\n Similarly, any online winnings are subject to Michigan\u2019s 4.25% state tax, and this includes winnings from welcome offers<\/strong>, which are common among online bookmakers.<\/p>\n\n
\n All online bookies must issue a W-2G form to those who win $600 or more and at least 300 times the wager amount. However, you\u2019re responsible for your own bookkeeping of your total winnings.<\/p>\n\n
Lottery Winnings<\/h2>\n \n\n
\n The Michigan State Lottery is laden with games and promotions, and any winnings from the lottery are also subject to federal, state, and local taxation.<\/p>\n\n
\n Here are some key points:<\/p>\n\n
The Michigan Lottery does not withhold taxes on prizes $600 or lower.<\/p><\/div><\/li>
Lottery winnings\/prizes in excess of $600 are categorized as income, so a W-2G form is required for your tax filings.<\/p><\/div><\/li>
Michigan does not withhold taxes on winnings from $601 to $5,000, but you must report these funds to the Internal Revenue Service and the Michigan Department of Treasury.<\/p><\/div><\/li>
Winnings that exceed $5,000 must retain 24% for federal income tax. Prizes of this size are also subject to automatic withholdings at both state and federal tax levels. 4.25% is withheld for Michigan state tax<\/p><\/div><\/li><\/ul>\n\n
The Purpose of Michigan Sports Betting Taxes<\/h2>\n \n\n
\n Taxes will remain a source of contention wherever you are, but they can prove beneficial if the money generated is used in the right way.<\/p>\n\n
\n Michigan\u2019s low tax rate means the state doesn\u2019t collect as much in gambling taxes compared to other states, but the money earned can nonetheless go towards the improvement of local communities. The revenue can be directed and used for multiple ventures, with the taxes collected by online and land-based bookmakers\/casinos going towards the state\u2019s general fund.<\/p>\n\n
\n <\/p>\n\n
\n These funds can then facilitate the improvement of public services and infrastructure, potentially aiding the development of initiatives regarding education and healthcare in Michigan, too. For example, Michigan casinos contribute 8.1%<\/a> of their Adjusted Gross Receipts directly to the School Aid Fund.<\/p>\n\n
\n In Detroit<\/strong>, the state\u2019s biggest city, 30% of taxes from operators<\/strong> linked to their casinos go towards public services<\/strong>, 65%<\/strong> to the internet gaming fund<\/strong>, while the remaining 5%<\/strong> is designated to the Michigan agriculture equine industry<\/strong> development fund.<\/p>\n\n
How To Report Taxes on Sports Betting Michigan<\/h2>\n \n\n\n
\n \n \n \n \n $\"michigan$ \n <\/picture>\n\n \n
(Source: IRS)<\/figcaption>\n <\/figure>\n<\/div>\n\n\n
\n Casinos hand punters a W-2G form, where they need to detail their winnings. The IRS also receive a copy.<\/p>\n\n
\n Here are the thresholds for receiving a W-2G form:<\/p>\n\n
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\n $\"List$ \n <\/div>\n
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Winning $1,200 or more from slot machines or bingo<\/p>\n <\/div>\n <\/div>\n <\/li>\n
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\n $\"List$ \n <\/div>\n
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Winning $1,500 or more from a keno game<\/p>\n <\/div>\n <\/div>\n <\/li>\n
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\n $\"List$ \n <\/div>\n
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Winning more than $5,000 from a poker tournament (less the buy-in amount)<\/p>\n <\/div>\n <\/div>\n <\/li>\n
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\n $\"List$ \n <\/div>\n
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Winning $600 or more from an event like horse racing if the payout was at least 300x the wager amount<\/p>\n <\/div>\n <\/div>\n <\/li>\n <\/ul>\n <\/div>\n<\/div>\n\n
\n Casinos are not liable to hand out forms for minor wins, so it\u2019s your responsibility to keep up to date with all your gambling winnings to ensure you can accurately declare them as part of your federal tax return.<\/p>\n\n
Michigan Sports Betting Taxes<\/h2>\n \n\n
\n Michigan\u2019s taxation structure can be divided into three levels: individual, brand, and state. Here\u2019s a breakdown of all three:<\/p>\n\n
\n Individual State Taxes\n <\/h3>\n \n\n
\n Individuals are obliged to pay a 4.25% state tax on all their sports gambling winnings. A federal tax on winnings is also imposed, with the casino\/bookmaker withholding 24% for federal income taxes. This tax rate is dependent on an individual\u2019s income and tax bracket.<\/p>\n\n
\n Rules for Brands\n <\/h3>\n \n\n
\n Casinos and sportsbooks are also responsible for paying taxes and licensing fees to operate in Michigan. The size of their tax depends on the casino\u2019s revenue streams. For example, major establishments such as the MGM Grand Detroit, MotorCity Casino, and Greektown Casino, are required to pay 10.9% of their adjusted gross revenue in city tax, as well as 8% in state tax. In 2022, these three casinos generated over $250 million in tax revenue.<\/p>\n\n
\n Obtaining an internet gaming operator licence costs $100,000, with the application itself costing $50,000. The annual fee to continue operating in Michigan is $50,000. Internet gaming suppliers are subject to an initial licence fee of $5,000, which is renewable for $2,500 each year thereafter.<\/p>\n\n
\n State Tax Information\n <\/h3>\n \n\n
\n As well as Michigan\u2019s flat 4.25% tax rate, there are also city taxes to consider. 24 cities in the state have a local tax, and residents must pay a local income tax. Detroit\u2019s local tax is 2.4%, Highland Park\u2019s is 2%, and Grand Rapids and Saginaw is 1.5%. Others, including Albion, Jackson, Flint, and Hudson, all have a rate of 1%.<\/p>\n\n
\n Michigan is able to generate masses in gambling tax via individual winnings and licensing fees.<\/p>\n\n
ThePuntersPage Final Say<\/h2>\n \n\n
\n Paying tax on your gambling winnings can be seen as a distinct inconvenience. However, Michigan\u2019s 4.25% flat tax rate is fairly kind compared to other states, and taxpayers can take some solace in knowing that a chunk of their income is going towards improving local areas and surrounding communities.<\/p>\n\n
Resources<\/h2>\n \n\n
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\n $\"List$ \n <\/div>\n
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Michigan Department of Treasury<\/a><\/p>\n <\/div>\n <\/div>\n <\/li>\n
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\n $\"List$ \n <\/div>\n
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Michigan Revenues and Wagering Tax Information<\/a><\/p>\n <\/div>\n <\/div>\n <\/li>\n <\/ul>\n <\/div>\n<\/div>\n\n
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FAQs<\/h2>\n
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Do you have to pay taxes on sports betting?<\/strong><\/div>\n <\/div>\n

<\/h2>\n\n

Michigan Sports Betting Taxes<\/h2>\n \n\n\n Michigan\u2019s taxation structure can be divided into three levels: individual, brand, and state. Here\u2019s a breakdown of all three:<\/p>\n\n

Resources<\/h2>\n \n\n\n \n \n \n \n \n \n <\/div>\n \n Michigan Department of Treasury<\/a><\/p>\n <\/div>\n <\/div>\n <\/li>\n \n \n \n \n <\/div>\n

FAQs<\/h2>\n \n \n \n \n

Michigan Sports Betting Taxes<\/h2>\n \n\n
\n Michigan\u2019s taxation structure can be divided into three levels: individual, brand, and state. Here\u2019s a breakdown of all three:<\/p>\n\n

FAQs<\/h2>\n
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\n \n
\n \n
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Do you have to pay taxes on sports betting?<\/strong><\/div>\n <\/div>\n