Yes and no. Yes, you have to pay taxes if you win $5,000 or more. Casinos will withhold the federally mandated amount of 25% if you provide them with your social security number and if you refuse they will withhold 28%. This withholding is for federal income tax. For Michigan’s state tax, you are obligated to report it and it is subjected to a 4.25% state tax. If you win less than $5,000 then no, you will not have to pay taxes.