Read more about online gambling in MI
On this page, you can read everything you need to know about MI online gambling:
Bojoko helps players understand how online gambling works in Michigan. Michigan gained its license for online gambling in December 2019. Starting with the release of its first 10 sportsbooks and eight online casinos in January 2021.
Since online gambling in Michigan is still fairly new, it might be difficult to know exactly what to look for when you want to play in an online casino. How do we know which online casinos are legit? How much tax do I need to pay on winnings? Am I following the law when it comes to Michigan gaming?
Carry on reading to find out everything you need to know about online gambling in Michigan.
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Online gambling in Michigan is permitted to those who are 21 and over, and only through licensed operators. Michigan legalized online gambling in 2019 through the Lawful Internet Gaming Act and Lawful Sports Betting Act. It became the 20th state the legalize sports gambling and the fifth to permit online casinos.
Types of online gambling in Michigan:
We take a closer look at MI online casino gambling websites on a dedicated page.
In Michigan, much like other states in the US, online gambling sites can only operate alongside a brick-and-mortar casinos. The Lawful Sports Betting Act permits the three commercial casinos in Detroit, as well as the 12 tribal casinos in the state, to offer online sports betting. Each operator and tribe is allowed to open one online gambling brand, which totals 15 online sportsbooks allowed in Michigan.
Under the same legislation, each operator and tribe is allowed to have one skin for online poker and another skin for an online casino. That's three online gambling skins for each operator. The Wire Act also stipulates that the online gambling servers must be located within the state. A geo-locator software like GeoComply or GeoGuard is also used to see whether players are located in Michigan while playing.
All gambling in Michigan falls under the jurisdiction of the Michigan Gaming Control Board (MGCB).
The MGCB is responsible for:
Although the MGCB has the authority to oversee compliance in tribal casinos, they ere regulated by the National Indian Gaming Commission and the government of the appropriate tribal community.
A sign of a good online gambling site is one that can show a "badge" to state that it is licensed. Requirements are put in place to ensure an online gambling site is compliant and safe for consumers to use.
All winnings are taxable as income, meaning they need to be reported on your annual tax return. Failure to report income and taxes could leave you in a tricky situation with the IRS.
Things to take into account:
The Michigan Lottery doesn't withhold any taxes on winnings of $600 or below, however, winnings of more than $600 will require a W-2G form to be filled. Winnings between $601 - $5,000 need to be reported to the IRS and the Michigan Department of Treasury.
Winnings above $5,000 are subject to automatic withholding of 24% federal tax and 4.25% state tax.
In addition to the 4.25% state tax, you'll also need to pay a 24% federal gambling tax on your winnings.
Different gambling activities have different minimum thresholds for reported winnings:
Please note the difference between gross and net winnings:
If your winnings go above the threshold, the casino will provide you with a W-2G form. This will need to show the amount won and the amount of tax withheld at the gambling facility.
You can find Form W2-G and other useful information on the IRS website.
It is imperative that you report your gambling winnings in your tax return. On a good note, you can also deduct your gambling losses from these winnings. It's best practice to keep track of your deposits and withdrawals so you have all the details ready for filling out your tax return.
EXAMPLE: You win $3,000 from an online slot. During the year, you've lost $1,750. You pay the federal tax only for the $1,250 of net winnings.
Michigan has a long and healthy history of legal gambling. The first opportunities for gambling came in the form of pari-mutuel horse racing which was passed under the Racing Act of 1933.
The Michigan Lottery appeared in 1972, enabling the establishment of the state lottery. In the same year, Charitable gambling was permitted by nonprofit organizations to raise funds for lawful purposes through raffles, licensed bingo games and even millionaire parties.
Online gambling finally made its way through in 2019, opening the gates for online casinos, sportsbooks and poker rooms.
In 1933 Michigan introduced pari-mutuel horse racing, in which bets are collected into pools and then payback is allocated to winners accordingly. The Michigan Lottery came in 1972, with scratch-off games gaining an interest later that year. This is also the same year that charitable gambling was legalized.
A groundbreaking moment in 1984 saw Fred Dakota, a member of the Kansas Bay Indian Tribe, run blackjack games in his home to challenge Michigan's restrictions on casinos. Because of this, other Indian tribes follow and form bingo halls and casinos.
In just under a decade, more history is made as a Michigan tribal casino comes into agreement with the state department. Michigan now has The Soaring Eagle Casino and Resort which agrees to donate 2% of its revenue to the state.
In 1996, Michigan state authorizes three casinos to be constructed in Detroit, the largest city in Michigan. Shortly thereafter, the MGM Grand becomes the first commercial casino to open in Michigan.
By 2013, online lottery sales begin which serves as a starting point for the discussion of online gambling expansion in future years.
Finally, in 2019 a host of laws come into play that legalizes sports betting, online poker and online casinos.
In the lead-up to 2019, Michigan was already on the path to making online gambling legal with a series of laws.
Governor Whitmer signed the Lawful Internet Gaming Act (LIGA) in December 2019, which authorized the Michigan Gaming Control Board (MGCB) to issue licenses to online gaming operators. Commercial casinos operating via a retail casino can apply, and tribal casinos can apply through the National Indian Gaming Commission. Under LIGA, internet poker is also authorized.
The governor also signed the Lawful Sports Betting Act (LSBA) which authorizes the MCGB to regulate sports betting within the state. Commercial casinos that hold a casino license can apply for a sports betting license, and Indian tribes can also apply under the National Indian Gaming Commission.
Tribal casinos in Michigan work a little differently from commercial casinos. This is because they're independent sovereign nations, and under the US Supreme Court, Michigan doesn't actually have any regulatory authority over tribal casinos. They are instead governed by the National Indian Gaming Commission.
Currently, the law permits the three commercial land-based casinos and 12 tribal casinos to open one sportsbook each, one poker site each, and one online casino each. This means they have up to three skins each to fill. In total, there could be up to 15 sportsbooks, 15 poker sites, and 15 online casinos.
The fast-paced nature of online gambling means however that this is subject to change. If there is a demand for more online casinos, more licenses could be permitted for other land-based casinos in Michigan. This would be great for competition and also give players more variety.
Legal MI online gambling sites have to provide responsible gambling tools. These can range from time limits on game sessions, deposit limits, and different forms of self-exclusion.
The Michigan Department of Health and Human Services (MDHHS) has a 24-hour toll-free helpline, 1-800-270-7117, if you or someone you know has developed a gambling problem.
You can also check out our responsible gambling page to find out more about tools and relevant organizations that can help you or a loved one with problem gambling.