Michigan Governor drives gambling taxation that could raise $800M for Medicaid

Michigan Governor Gretchen Whitmer has outlined proposals to adjust taxation on gambling, nicotine products, and advertising, arguing the measures could raise nearly $800 million to stabilize the state’s Medicaid system.

Whitmer proposes state budget outline

The budget publication was presented on behalf of Governor Whitmer by State Budget Director Jen Flood.

The key points outlined the services the Great Lakes State needs, and the Governor’s ideas to facilitate them were accompanied by commentary from several individuals involved in state infrastructure.

They included comments from Whitmer and Flood covering the Senior Property Tax Credit, literacy programmes, free school meals, higher education, roads, and Medicaid.

“My balanced budget proposal will build on our strong record of bipartisan success. It doubles down on shared, long-term priorities to create good-paying jobs, fix roads, save Michiganders money, and ensure every child can read, eat, and succeed. Let’s work together to deliver another balanced, bipartisan budget on time and keep moving Michigan forward,” said Whitmer.

Taxation driving services

The publication focused on options available to state tax officials to offset rising medical bills and healthcare costs. Whitmer has also emphasised the need to ringfence Medicaid funding amid continued federal pressures in 2026.

Sports and online betting were included in the budget materials, with proposed Medicaid contributions expected to be funded in part through updated gambling taxes. This includes a reported halt to gambling operators’ ability to deduct promotional bets from tax filings, which would generate an additional $21 million.

The new gambling taxes would contribute to a reported:

“$780.4 million to stabilize Medicaid funding, protecting access to health care for eligible Michiganders through revenue generated from a mix of funding mechanisms, including:

“$192.8 million from updating the state’s internet gaming, sports betting, and online gaming tax structure,” the statement read.

According to Michigan-based outlet Bridge Michigan, the proposal includes a “new per-wager tax on sports betting that would be 25 cents for a gambling platform’s first 20 million wagers per year, then 50 cents for each bet above that.” It is estimated to raise $39 million.

Further to this proposal, there would also be an 8 percentage-point tax increase on online casino gambling revenue exceeding $185 million, bringing in an estimated $136 million, the outlet reported. 

The tax proposals were lauded by commentators representing service-industry care providers, including Monique Stanton, President and CEO of the Michigan League for Public Policy. 

“At a time when the federal government is causing unpredictable economic shifts and slashing programs that help Michiganders stay afloat, we must focus on mitigating harm. Governor Whitmer’s plan to stabilize funding for Medicaid is a much-needed step toward protecting health coverage in our state,” said Stanton. 

Featured image: Governor Whitmer official

The post Michigan Governor drives gambling taxation that could raise $800M for Medicaid appeared first on ReadWrite.