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It has been a high-stakes week for the U.S. online casino industry. One state is considering a significant tax hike on iGaming, another has scheduled a pivotal legalization hearing, and sweepstakes casinos are facing a new legislative threat. Meanwhile, voters in Colorado have expressed strong opposition to bringing digital betting to the Centennial State.
Could Michigan raise online betting taxes?
Michigan Gov. Gretchen Whitmer is weighing a budget proposal that would increase the state’s tax rate for online gambling, covering both mobile sports betting and online casinos.
The state currently uses a sliding scale ranging from 20% to 28% based on adjusted gross receipts. Under Whitmer’s proposal, the top tax rate would jump to 36% for operators generating more than $12 million in monthly revenue. Currently, seven of the state’s 15 online operators consistently hit that threshold:
- Motor City Casino
- MGM Grand Detroit
- Bay Mills Indian Community
- Hannahville Indian Community
- Little River Band of Ottawa Indians
- Grand Traverse Band of Ottawa and Chippewa Indians
- Lac Vieux Desert Band of Lake Superior Chippewa Indians
If the 36% rate had been in place this past December, it would have generated an additional $14.3 million in tax revenue for the state.
Colorado voters reject online casinos
Just weeks after Mississippi residents signaled their lack of interest in real-money online casinos, Colorado residents have voiced a similar sentiment. A recent survey conducted by the National Association Against iGaming found that 80% of Coloradans oppose the legalization of online casinos.
“These results overwhelmingly show that Coloradans don’t want iGaming in their state, even after being presented with the industry’s best arguments,” Oliver Barie, the association’s government relations director, said in a news release.
“Colorado voters are sending a bipartisan message: Keep casino gambling in regulated, in-person settings and off our phones, out of our kids’ bedrooms, and away from families who can least afford the losses.”
The survey also revealed that 88% of respondents believe online gambling—including sports betting—is the most dangerous form of gambling regarding addiction risk.
Indiana lawmakers target sweepstakes casinos
A Senate subcommittee in the Indiana General Assembly voted 8-0 to advance a bill that would ban sweepstakes casinos in the Hoosier State.
Often marketed as a “free” way to play casino-style games, “sweeps” casinos allow players to purchase virtual coins that can be redeemed for cash prizes. This model has drawn scrutiny from regulators. States such as Michigan and New Jersey have already taken steps to classify sweepstakes casinos as unregulated gambling, effectively forcing operators out of those markets.
Advocates for the industry argue that rather than a ban, lawmakers should regulate the platforms to create a new revenue stream for the state.
Key hearing set for Maryland online casinos
Maryland lawmakers have set a date for a critical discussion on the future of iGaming. On March 11, the state Senate will hear three bills, including a primary proposal to legalize online casinos.
The proposed legislation includes five-year licenses with fees as high as $1 million, though a specific tax rate has not yet been established. While the hearing marks a step forward, the road to legalization remains long. If a bill passes the House and Senate, it must then be approved by Maryland voters on the November 2026 ballot.
