Michigan is one state that has been at the forefront of online gambling regulations. It continues to set an example in an ever-changing field. We discuss this in the article below.  

The laws regarding online gambling in the US are fragmented. Each state has its own views and rules regarding what can and can’t be done. Some allow online casinos, while some have banned them outright. Some allow sportsbooks at tracks, but not elsewhere or online. Others move backward and forward between decisions. Michigan is one state that has been at the cutting edge of legislation and has set an example for how it can be done successfully.  

The 2019 Lawful Internet Gaming Act 

The story of the United States and online gambling began way back in 2018. The Supreme Court decided that the outright ban on sports betting was against the Constitution. With this change, states were now free to decide on their own laws when it came to online gambling. New Jersey had been one of the driving factors in overturning this ban and was the first to make legal inroads. However, it was Michigan that set the bar.  

The Lawful Internet Gaming Act of 2019 defined how gambling in Michigan would work. It came along at the same time as the Lawful Sports Betting Act and was a way to bring gambling businesses, which were transitioning to online models, up to date. Its remit was to ensure that internet gaming operators and platform providers were licensed and regulated.

This meant complying with various rules and regulations of internet gaming rules. A separate entity, it was known as the Internet Gaming Rule 432.641. It stated that players and users now had a separate way to bring complaints against a provider. This was distinct from the patron complaints made to the Michigan Gaming Control Board, which dealt with physical casinos.

As a foundation, Michigan has built on this and now has a healthy ecosystem of providers. Many of them are also overseen by third parties, who will rank and review them based on different factors such as bonuses, markets, and payment methods. With systems like the ones in place on websites like SBR, consumers now have the best options at hand. This has made Michigan a beacon in the world of iGaming legislation.

Ever-Evolving Laws 

This was the basis of Michigan gambling law, but the state has not rested on its laurels. There are constant changes and adaptations taking place to maximize the benefits and increase consumer safety.  

A perfect example of this was a recent bill submitted by Sam Singh and Jeremy Moss. This was for a raise in taxes. Unlike the sweeping changes in other states, Michigan proposed doing this minimally and gently, with a possible 1% addition to the tax rate. This would have taken sports betting operators’ tax on receipts from 8.4% to 8.5%.

In contrast, at the same time, other states were trying to reverse the damage done by huge, sudden tax hikes. Ohio, for instance, was considering moving its rate from 20% to its previous level of 10%. This was to increase market sustainability, suggesting the initial proposed hike of 10% caused significant damage to the sector. Despite neither of these bills being carried over to 2025, it showed how Michigan’s measured approach worked.

The Results of Michigan’s Laws

At the end of 2024, Michigan’s iGaming and sports betting revenue topped the $2.9 billion level. The results of this were not just good news for Michigan casino operators, but also for groups of people who benefit from it.  

Around $500 million of this was given to the School Aid Fund. This provides the bulk of money for education establishments, including higher education, and teacher retirement funds. Over half of the SAF’s budget goes to districts on a pupil-per-pupil basis. Thus, it has had a direct impact on the education of children in the state. Other recipients have been the First Responder and Agricultural Development funds.  

All of this is bound to have an impact on neighboring states and their attitudes to iGaming. In fact, since this, a relaxation has occurred across America. In neighboring Illinois, several Casino bills have been submitted. However, many of them did not make it past the committee discussion. This shows a clear discourse that needs to be discussed further.  

States Without Gambling Legislation

Around 40 states now have legalized online sportsbooks. Yet very few, only seven in total, allow online gambling in digital casinos. The results of this are mixed. Those for it argue that many turn to offshore casinos, which can be unregulated. It can mean people use unsafe or less transparent operators. This obviously means less tax revenue for states.  

Another result of this has been the rise in sweepstakes casinos. These casinos do not operate under gambling laws, but the rules governing lotteries and sweepstakes. People can play casino games for free and accumulate coins, which can then be cashed in for prizes. By doing this, it uses a legal loophole to provide gambling services, though without technically gambling. These have become extremely popular in states where online casinos are forbidden.  

Many states are also against the introduction of online casinos as they believe it may cut into the profits of physical casinos. Being able to play on a mobile device brings a level of convenience that the brick-and-mortar providers believe would reduce footfall in their businesses. New York is one state particularly fearful of this. It has quite open laws around gambling, but no iGaming is allowed.  

Michigan set an example by defining what internet sportsbooks and casinos were. It made clear definitions between them and between their land-based counterparts. By doing this, it was able to maintain better control. The results of this have been fair taxation, bringing revenue for the state and operators. 

In an uncertain economy, tax revenues from industries like this are vital. This may mean we see more states change their rules and regulations in the coming years. Michigan set the bar with its laws and continues to make improvements. It is the benchmark for how to integrate these systems and remains so.