Michigan gambling is regulated by the Michigan Penal Code Chapter 750, sections 301 through 315a and the Michigan Gaming Control and Revenue Act (Michigan Compiled Laws Chapter 432). To date, on-site sports betting is permitted, with online sports betting, casino games and daily fantasy sports betting expected to be legalized before the end of 2021.
Online gaming, together with the following are currently illegal in the State of Michigan:

● Pool selling;
● Registering bets; and
● Gambling in stocks, bonds, grain or produce.

The legality of online gambling seems to centre around the move to ban iGaming in 2000 however, no further move to provide clarity has happened since then. So, while online gambling isn’t exactly legal, it isn’t officially illegal either.

According to Section 750.314 of the criminal code:
“Any person who by playing at cards, dice, or any other game, or by betting or putting up money on cards, or by any other means or device in the nature of betting on cards, or betting of any kind, wins or obtains any sum of money or any goods, or any article of value whatever, is guilty of a misdemeanor if the money, goods, or articles so won or obtained are of the value of not more than $50.00. If the money, goods, or articles so won or obtained are of the value of more than $50.00, the person is guilty of a misdemeanor punishable by imprisonment for not more than 1 year or a fine of not more than $1,000.00.”

This broad definition of gambling implies that you could be prosecuted if you are caught breaking the law. While specific details aren’t confirmed, your punishment will be dictated by how much you win.

Penalties for violating Michigan’s gambling laws vary depending on the circumstances of the case, including the defendant’s criminal history and the exact crime charged. Many gambling offences are misdemeanours punishable by imprisonment for no more than one year and a maximum fine of $1000.

In a nutshell, as long as it benefits the state, through taxes, you are welcome to gamble in Michigan. Your winnings are taxed and those taxes are used to contribute towards education and other social projects.

The State of Michigan requires you to report all your winnings on an annual basis to the Internal Revenue Service. These winnings, which are reported as additional income, are taxed on a sliding scale on the W-G2 form and is required when:

● The winnings (not reduced by the wager) are $1,200 or more from a bingo game or slot machine.
● The winnings (reduced by the wager) are $1,500 or more from a keno game.
● The winnings (reduced by the wager or buy-in) are more than $5,000 from a poker tournament.
● The winnings (except winnings from bingo, slot machines, keno or poker tournaments) reduced, at the option of the payer, by the wager are:
○ $600 or more, and
○ At least 300 times the amount of the wager.

Michigan requires a gambling license when a person has to provide something of value, for example, money or canned goods, to enter a game of chance, such as a raffle to win a prize.

That game of chance usually needs to be licensed by the Michigan Lottery Charitable Gaming Division.

A license is also needed if you’d like to sell Lottery tickets through your business in the State of Michigan.

According to the Michigan Lottery Charitable Gaming Division:

Any person who is 18 years of age or older and a Retailer in the State of Michigan may submit an application for licensure as a lottery retailer in accordance Act 239 of the Public Acts of 1972, and requirements of the Lottery's licensing procedures, except no person may submit an application that: will be engaged primarily in the business of selling lottery tickets only, or an employee of the Michigan Lottery or resides in the same household as an employee of the Michigan Lottery.

The Commissioner or their designee may license those persons who, in their opinion, will best serve the public interest, convenience, and public trust in the Lottery and promote the sales of Lottery tickets. Before issuing or renewing a license, the Commissioner may consider factors including, but not limited to, the following: the financial responsibility and security of the applicant and their business or activity, the accessibility of the place of business or activity to all the public, the sufficiency of existing Lottery retailers to serve the public convenience, the expected sales volume of lottery tickets, and the ability to offer a high level of customer service to lottery players.

Your Lottery Licensing Application packet, which needs to be completed in full, should be accompanied by your non-refundable $150 application fee.

The Lottery also conducts a background investigation on the applicants. The background investigation includes a credit history check, a tax record check, and a criminal history check. Having a criminal record that would adversely affect the integrity of the Lottery will mean that your application will most probably not be approved.

But, if your credit history is good, and your criminal history has nothing to do with money, your application should be successful.
To maintain your license, your business needs to meet the minimum income requirement of $500, and operate per all applicable laws, rules, and regulations.

Aside from your application fee, an annual fee of $550 is required to continue selling Lottery tickets.