Michigan online gambling guide

Written by Denise Mathey

Checked by Elena I. •

Last updated on May 20, 2025

Since MI gambling sites were legalized in 2019, the Great Lakes state is fast becoming one of the biggest players on the online casino and sports-betting front, and Michiganders now have a decent variety of gambling options and establishments.

Understanding the legalities and how to pay your gambling taxes can be frustrating, so our experts have created a guide to online gambling laws and taxes in Michigan to make the job quicker and safer.

• Michigan taxes
• Tax rates
• Local income tax
• Paying gambling taxes
• Undisclosed winnings
• Winning deductions
• Is MI gambling legal?
• MI gambling and safety
• Gambling age in Michigan
• MI online gambling laws
• Different gambling types
• Responsible gambling
• FAQs

Michigan online gambling tax

Online gambling is live and legal in the state of Michigan (MI). This includes online casinos, online sportsbooks, horse racing and pari-mutuel betting, fantasy sports, and the Michigan Lottery. Sweeps casinos however cannot operate in MI.

As it stands, all Michigan players have to pay 24% federal tax on winnings. This applies to casinos, poker tournaments, and sports betting winnings, among bingo and lottery winnings.

MI state additionally taxes any legal gambling money you win at a rate of 4.25%. That said, all gambling winnings that are declared in your federal adjusted gross income (AGI) must be included in your MI state income tax.

Unlike many other states, Michigan charges its own income taxes on gambling money. This is known as local income tax or city income tax. While the tax rate varies from one city to another, Detroit has the highest local income tax at a rate of 2.4% on gambling winnings.

Tax rate for each type of gambling in MI

Since MI does not have a tiered state tax rate; you’ll need to declare and pay 4.25% of all money you won online, whether they were from online casinos, sportsbooks, poker tournaments, or the Michigan Lottery. The only addition to the 4.25% rate is the local income tax rate which depends on the city where you won the money.

The table below will show you how MI state tax combined with city tax effects how much tax you pay in total:

What is MI local income tax?

Local income tax applies to various cities in MI. Besides reporting state tax at a rate of 4.25%, you’ll need to report local tax as well. The rates vary from one MI city to the next.

Here is a list of Michigan cities that charge local income tax, along with their respective tax rates for MI residents and non-residents:

1. Detroit: Residents – 2.4%; Non-residents – 1.2%
2. Highland Park: Residents – 2.0%; Non-residents – 1.0%
3. Grand Rapids: Residents – 1.5%; Non-residents – 0.75%
4. Saginaw: Residents – 1.5%; Non-residents – 0.75%
5. Other cities: Residents – 1%; Non-residents – 0.5%

The table below shows the total or final tax rate you would be liable for based on the MI city your winnings came from:

How to pay gambling taxes in MI

All Michigan players must adhere to federal, state, and city tax requirements. The following section will guide you on how to report your gambling taxes, including the required tax forms at each level:

1. Report your winnings to the IRS

You must let the IRS know about all money you’ve won online, by stating it on your federal income tax return. To do this, you need to complete Form W-2G, which will be sent to you by the online casino or other gambling operator if your winnings exceed certain thresholds.

State level

If you win over $5,000, the state may automatically hold back 4.25%. For all amounts between $600 and $5,000, withholding is not required, however, you are still liable for making the IRS aware and paying the state tax too. You will need to complete the relevant forms, which are:

• MI-1040 (Michigan Individual Income Tax Return)
• Schedule A of MI-1040 (for gambling loss deductions from federal AGI)
• MI-1040D (Adjustments to Income) – This form is only relevant if you’ve already deducted gambling losses on Schedule A of Form 1040.

Local level

Out of 276 cities in Michigan, 24 of them impose local income tax in addition to state tax. Each city will have its own tax forms. For example:

• Players in Detroit, will need to complete Form 5118.
• Players in Grand Rapids, will need to complete Form GR-1040.

2. Withholding requirements

If you win over $5,000 gambling in MI, the state will automatically hold back 4.25% of your winnings. If your winnings are less than $5,000, you must still declare it on MI-1040, but they will not be automatically held back. 

While cities in Michigan do not withhold local taxes on gambling winnings, you are responsible for disclosing and settling any applicable local taxes.

3. MI State deductions on gambling winnings

Michigan does allow you to claim gambling losses, but only if you have deducted them on your federal taxes first. Additionally, losses cannot exceed winnings. As mentioned earlier, you need to complete Form 1040 if you’re claiming gambling losses and attach Schedule A to your MI return.

Unfortunately, MI cities do not allow local taxes to be reduced by claiming losses, so you must pay local or city income tax on all money won online – no exceptions.

What happens if you don’t report gambling winnings in MI?

If you win money in MI and you don’t report or declare it to the relevant tax authorities, which are the IRS as well as Michigan’s Department of Treasury, you may face penalties. 

This means that both the IRS and the state will charge you extra fees on top of what you already owe. In the event that the Michigan Tax Department does an audit, you could end up paying more in penalties and fines.

So, it’s always in your best interest to learn about gambling taxes in the state, keep detailed records of your wins and losses, and report all winnings via the relevant forms and agencies.

Does MI allow gambling winning deductions?

When you win money gambling online, you must state your winnings on your tax forms. Additionally, both the IRS and MI allow you to reduce your taxable winnings by reporting losses; however, this is only allowed under certain conditions:

• When filing your gambling winnings with the IRS, you need to include all of your allowed deductions, bet it mortgage interest, medical expenses, or money won online under Schedule A of Form 1040.

• Additionally, you can only subtract losses up to the amount you won. So, if you won $5,000 from gambling online but lost $7,000, you can only deduct $5,000 in losses. The other $2,000 cannot be subtracted or carried over to another year.

So, in a nutshell, provided you claim losses on your federal taxes, you may also do the same on your MI state tax return.

Is online gambling legal in Michigan?

Online gambling is legal in Michigan for those over 21. The state legalized casino games, sports betting, and poker rooms back in December 2019 with the Interactive Wagering Act.

Online sportsbooks were then launched in March 2020, followed by online casinos and poker rooms in January 2021. The Michigan Gaming Control Board (MGCB) oversees all online gambling activities in the state, ensuring that all are conducted fairly and responsibly.

Here are some things for players to keep in mind:

• Location — You don’t have to be a resident of Michigan, but you must be physically within the state borders to place a bet online.
• Licensed operators — Use online gambling platforms that are licensed and regulated by the Michigan Gaming Control Board (MGCB). This ensures the safety of your data, funds, and fairness of play.
• Responsible gambling — Set limits for yourself and gamble responsibly. There are resources available to help if you or someone you know struggle with gambling addiction.

Michigan gambling and safety

Online gambling was legalized in Michigan in December 2019, but the regulatory framework wasn’t finalized until January 2021, with the first MI gambling sites being awarded an official license that same month.

Seeing that authorities took a year to create a strong infrastructure, it’s safe to say that the bar for legalized online gambling in Michigan is set pretty high and that obtaining an MGCB license is a solid indication of an operator’s trustworthiness.

MGCB license requirements include a highly secure, almost unhackable connection via SSL encryption, an easily accessible responsible gambling page, and real-time customer support.

Having said that, Time2play experts aren’t satisfied with the minimum license requirements. We look for additional Michigan-approved seals of trust like BMM Testlabs and Gaming Laboratories International. The approval of these organizations shows us that operators have gone above and beyond the minimum standards to protect players.

Gambling age in Michigan

Michigan has put together a two-tiered system for the legal gambling age, with the minimum age varying depending on the type of activity.

18 and up:

• Casinos — This applies only to tribal casinos regulated by the Michigan Gaming Control Board. Games like slots, table games (poker, blackjack, roulette), and other casino offerings are legal for those 18 and over.
• Bingo and poker — Anyone 18 and up can play bingo or poker and assist in the conduct of the game as long as the bingo game is not held at an online casino.
• Lottery — While adults cannot purchase lottery tickets for someone under 18, the tickets themselves are not age-restricted. This means someone over 18 can buy a lottery ticket to share with or as a gift for a minor.
• Pari-mutuel betting — Similar to the lottery, attending horse races or other events with pari-mutuel betting (wagering pool on race outcomes) is legal for those 18 and over. Placing bets also requires being 18.

21 and up:

• Commercial and Detroit casinos — Players wishing to visit non-tribal and/or Detroit-based casinos must be at least 21 years of age.
• Online gambling — This encompasses all forms of online gambling legalized in Michigan, including online casinos, sports betting platforms, and online poker rooms. To participate in any of these activities, you must be at least 21 years old.

Important notes

• Age verification — Casinos, both physical and online, will have age-verification procedures in place to ensure compliance with the law.
• Physical presence for online gambling — Regardless of age, you must be physically located within the state of Michigan to place an online wager.
• Tribal sovereignty — Tribal casinos operate under their own sovereignty and may have slightly different age restrictions for specific games or activities. It’s always best to check the individual casino’s age policy before visiting.

The table below splits MI gambling by type along with the minimum legal gambling age in Michigan.

Michigan online gambling laws

With the legalization of online gambling in Michigan, doors opened for residents to enjoy online casino games, sports betting, and poker from the comfort of their homes. Let’s explore the legal landscape of online gambling in Michigan within the different sectors.

Online casinos Legal since 2019

It’s been an exciting ride for Michigan online gambling, with operators in the Great Lakes state scrambling to catch up with other states since legalization in 2019.

A global pandemic and two state-wide shutdowns put the brakes on the process, until January 2021 finally brought with it the mass licensing of 15 MI online casinos and gambling sites. In contrast, fantasy sports contests have been legal since May 2018.

Today, there are a total of 16 Michigan gambling sites, offering an assortment of online casino games and poker. One fun fact about online gambling in Michigan is that poker games are offered separately on specific sites.

• Biggest industry names available
• Reputable software providers
• Payout processing average of 24–72 hours
• 24 – 48 hour payouts

• Limited game variety

Sweepstakes gambling

Sweepstake casinos can’t operate in MI. Consequently, popular sweepstakes casinos like Chumba Casino and Luckyland Slots have left the Michigan market to avoid legal challenges.

Michigan’s law regarding sweepstakes casinos follows the same rules as other states like Washington, Idaho, and Nevada, which have also stopped sweepstakes gaming due to various concerns. 

Online casinos view sweepstakes sites as direct competition, and therefore, traditional casino operators will want stricter regulations and even try to acquire sweepstakes operators to reduce or eliminate competition.

Betting sites Legal since 2019

Online sports wagering joined the fray for online gambling in Michigan immediately upon legalization, but went through the same hiccups as online casinos. Although the official green light for Michigan online sports betting given in December 2019, it would take another 13 months for the first sports MI gambling sites to go live.

Clearly, it’s what the Great Lakes state had been waiting for as, within 10 days of the first legal online bet, over $100 million had been laid down in wagers. Interestingly, Michigan sports betting sites are able to legally offer wagering on college sports, although the line is drawn at high school sports. This is unlike the situation within NJ betting, where a referendum that makes provision for such wagers keeps getting shot down.

• College sport wagers are legal
• More licenses expected
• VIP rewards for top bettors

Online poker Legal since 2021

Real-money online poker joined the rest of the MI online gambling scene the moment the Michigan Gaming Control Board (MGCB) gave the official seal of approval and granted the first licenses in January 2021. 

The first online poker room to go live in MI was PokerStars, bang on the dot before January was over. BetMGM Poker MI followed fast on its heels, with mere hours in between, turning what’s usually a dreary month in one of the coldest US states into a second Christmas for poker enthusiasts. 

Things pretty much reached a stalemate after that, only one new poker license has been granted — to Caesars’ WSOP. Our experts have done the work to check which site offers the best poker all-round experience to determine the top ranking.

• Specialist sites offer full poker experience
• Reputable brand names
• Numerous promotions

• Only three licensed sites: PokerStars, BetMGM, Caesars

Different forms of gambling in Michigan

Players in the Great Lakes state take their games seriously, evident by the popularity of other gambling options even before the legalization of all forms of MI online gambling in 2019.

The oldest is undoubtedly the state lottery in its offline form, millions in winnings paid out since the first lottery ticket was sold in 1972. Daily Fantasy Sports (DFS) also takes up a big chunk of the attention when it comes to online gambling in Michigan since it became legal in October 2018, with a full regulatory framework drawn up in 2020.

Lottery

Lottery is a big deal in Michigan, and since the online version became legal on August 11, 2014, its popularity continued to explode. Lottery clubs, which see various players forming a syndicate and splitting the wins, have become the norm and are also viewed as an efficient way for the winners to keep their anonymity. Which, given that some players have landed wins in excess of $5 million, can be an understandable desire.

Fantasy sports

The DFS market enjoyed a full two years of unregulated legality after it was given the green light by lawmakers in 2018. It took them till 2020 to formalize a regulatory framework, during which time existing providers were pretty much allowed to operate without a license. DraftKings and FanDuel are the go-to options for DFS punters in MI.

Bingo

Bingo falls within the MI gambling framework and is regulated by the MGCB. However, whereas the legal gambling age for MI online casinos is 21, the minimum age to take part in bingo games – as long as they don’t require a casino registration – is 18. Most legal online gambling sites in Michigan offer bingo options for 21+ players, but outside of that, the options are actually rather limited.

Gambling responsibly in Michigan

Although gambling can be a fun pastime for many, it can become addictive for some. If you’re concerned about your gambling habits, there are online resources to help you manage your gambling, including counseling, therapy, local resources, and assistance with setting operator-based restrictions like account limits and self-exclusion.

Here are some organizations in Michigan that can provide support:

• Michigan Department of Health and Human Services offers confidential advice, assistance programs, and a 24/7 helpline.
• Michigan Gaming Control Board also offers access to the helpline, along with links to specialist national bodies.
• Michigan Association on Problem Gambling is another agency with in-depth information, advice, and support.
• National Council on Problem Gambling is an organization that offers coast-to-coast access to both federal and local resources to help reduce any gambling-related harm.

FAQs