Michigan Gov. Gretchen Whitmer

  • Michigan Senate Bill 764, which creates a state tax deduction for sports betting losses, passed the Michigan House of Representatives on Tuesday.
  • The bill would allow taxpayers to deduct any gambling losses reported on their federal tax return – it currently awaits Gov. Whitmer’s signature.

LANSING, Mich. – The Michigan House of Representatives passed a bill that creates a new state tax deduction for sports betting and other gambling losses Tuesday, the final session day of 2021.

Senate Bill 764, introduced by Senator Curtis Hertel, allows taxpayers of Michigan to deduct any gambling losses reported on their federal tax return. This would allow losses to offset winnings, similar to federal law.

Under the bill, bettors cannot deduct losses in excess of their taxes owed.

The bill made it through the Senate Finance Committee and passed through the Senate in the past few weeks before being passed by the House on Tuesday. SB 764 now moves to Governor Gretchen Whitmer’s desk, which means the deductions should be available for 2021 tax filings, the first year with legal online sports betting and casino gaming available in Michigan.

Hertel, SB 764’s primary sponsor, says the bill fixes a “weird loophole” that has addled the legal Michigan sports betting industry since its launch.

“[The loophole is] wrong. No one should have to pay taxes on money that they never earned or had. And there are many, many Michiganders who will be caught up in this situation, which is really unintentional,” said Hertel.

Whitmer has two weeks to examine the bill – which has broad bipartisan support and no real pitfalls – and sign it into effect.

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