Michigan continues to show improvement across tax revenue generation, boasting a 5.9% increase in net lottery revenue and major taxes from October 2024.
Net income tax revenue was the highest performer, generating $1.1 billion, which represented a 14.9% increase on the previous year’s total. While sales tax receipts recorded a 2.5% increase on their year-on-year total, the $916.5 million generated was slightly below the forecasted level.
The use tax collections of $263.6 million not only showed a 10.6% year-on-year increase, but it was also almost $28 million over their projected level.
The state’s gambling industry has been a key component in tax generation in recent years, and being one of the few states to offer licensed online casino gaming has helped. Online gambling specialist Jovan Milenkovic explains in this guide that the convenience and variety of payment methods, as well as the state-of-the-art technology being used to create immersive gaming environments and protect users, have been instrumental in the growth of online gambling in the state.
The popularity of land-based casinos and sports betting operations, as well as their growing online services, has helped the gambling industry in Michigan generate billions in taxes to date. Gaming tax in the state is set at 18%; 8.1% of this goes to the state, with the remainder going to Detroit.
Industry growth allowed the state to declare that the gross online revenue for September was its second-highest total. The $302.7 million generated was just 3.1% behind the record, which was set in August, and represented a 16% year-on-year increase.
The online sports betting industry recorded a 25.3% gross receipts drop, compared with iGaming, which enjoyed a 27.9% increase. Adjusted gross receipts that take into consideration promotional spend rose for iGaming by 22.3% over the year, while sports betting recorded another disappointing drop by 52% from the previous year.
Other impressive performances in the state have come from state education collections that showed year-on-year growth of 7.2% and delivered just short of $78 million above projections, and the School Aid Fund collected $52.8 million above projections.
Areas the state will be hoping to improve upon include General Fund tax revenue, which fell short of its projected total by $22.7 million. A 40.4% decrease in CIT, Michigan Business Tax, and Single Business Tax is another area that the state will focus on, with its $91.6 million falling $84.5 million short of expectations.
There are clear success stories in this year’s fiscal revenue dashboard in terms of year-on-year growth, but there will also be some cause for concern among areas that have failed to perform as expected.
The growth of the gambling industry will be a major boost to the state, especially its casino and iGaming divisions. While sports betting in the state hit a bit of a slump, the imminent arrival of the World Cup in 2026 should help to bolster it.