FanDuel and DraftKings Urge Customers to Oppose Tax Hike in Michigan
FanDuel and DraftKings have taken action against proposed tax increases on sports betting and online gaming in Michigan, calling on their customers to lobby legislators to oppose the measure.
FanDuel and DraftKings Push Back Against Michigan Tax Hike
The two leading operators have sent emails to their Michigan users, urging them to voice opposition to proposed legislation that would increase taxes on sports betting and online gaming.
In their communications, the companies emphasized that higher taxes could lead to reduced promotional offers, fewer bonuses, and less competitive odds. They also argued that the tax hike might threaten the creation of hundreds of potential new jobs.
FanDuel and DraftKings, along with BetMGM and Fanatics, are members of the Sports Betting Alliance (SBA). The SBA has provided a form on its website that users can fill out and send to their local legislators to express opposition to the tax increase.
Proposed Tax Increase
FanDuel and DraftKings have taken this stand despite the relatively small size of the proposed tax hike. Currently, Michigan’s tax rate for sports betting is 8.4%. The proposed legislation seeks to raise this rate by 0.1 percentage point, resulting in an 8.5% tax rate.
However, the companies may be reacting to the broader implications of this move rather than the small increase itself. Recent trends across the U.S. indicate a growing inclination among states to raise taxes on sports betting and online gaming.
Illinois Sets a Precedent Despite FanDuel’s Opposition
Operators, particularly FanDuel, also actively opposed a similar tax hike proposal in Illinois earlier this year. They engaged their Illinois customers in lobbying efforts against the initiative.
FanDuel sent alerts to its Illinois users, highlighting the potential negative impact of the tax hike on their favorite pastime and the industry at large.
Despite these efforts, the Illinois Senate approved a progressive tax increase as part of its 2025 budget. Instead of a flat 15% tax rate, Illinois implemented a progressive tax structure, imposing higher rates on operators with greater revenues. The new tax structure took effect on July 1, 2024.
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