FanDuel Asking Michigan Customers to Help Stop Proposed Tax Hike

FanDuel Sportsbook isn’t going to take a proposed tax hike in Michigan lying down.

The industry leader sent an email blast earlier this week asking its customers for help. The sportsbook requests that they contact their local legislators about a proposed tax hike on operators. The email contains a link to the Sports Betting Alliance’s website, which has a template for them to fill out and send to lawmakers.

Michigan’s tax rate for sports betting operators is currently set at 8.4%.

Bill Would Only Raise the Rate by 0.1%

One obstacle to FanDuel’s effort is the small increase being proposed. The bill being considered would only raise the tax rate by 0.1%, which may not be enough to convince people to take action.

FanDuel claims that the low tax rate hike is really an attempt to start a conversation about implementing an increase. That is why the operator is attempting to quickly build opposition before lawmakers have a chance to discuss and consider the bill.

FanDuel Claims Hike Will Hurt Market

FanDuel’s letter to customers echoed the sentiments of operators over tax hike proposals across the country. The sportsbooks claim that any raise in tax rate will lead to watered-down odds and fewer promotions as they attempt to make up for the lost revenue.

“Use the link below to tell your state representatives NO to a tax hike on legal sports betting and iGaming,” it reads. “Why does this matter? A new tax on sports betting and casino games will have a MAJOR impact on how you enjoy game day AND your favorite games. Promotional offers and the best odds will be at risk if politicians rush in this surprise tax hike.”

National Clash Over Tax Rates Heating Up

This has been a fantastic year for sports betting markets across the US. Many states have seen record-setting handles over the last few months, showing that the industry continues to grow.

The growing numbers have led to many states wanting a more significant cut. That has led to several proposals similar to those in Michigan. Most of those efforts have failed thanks to pushback similar to FanDuel's.

One state that did manage to raise its tax rate was Illinois. The Land of Lincoln originally proposed raising its rate to 51% but instead implemented a tiered system. That led to operators being taxed based on the revenue, meaning industry leaders pay a higher rate than their smaller competitors. This allowed the state to break up the alliance of sportsbooks opposing a hike, leading to the bill being passed.