TB, I've always assumed that Michael would have been receiving the proceeds from any number of Mafia connected activities in the east and west. In addition, he may have been quite an investor. Afterall, as the novel states, the Corleone family under Vito owned valuable real estate in New York and at least parts of brokerage firms. I would think that Michael was just as good an investor as Vito if not better. Of course, we don't know how Michael "owned" any casinos. I'm sure that such ownership may have been suspected but was quite opaque to any prying eyes. Thus, in GFIII, he is able to distribute to the dons the profits from the sale of the casinos and there's no hint of any associated problems with the law.

It is also worth noting that Michael's opportunities for investment would have been much greater than Vito's given the tremendous expansion of the US and world economies during his tenure as Don (ITT & IBM to name a few)..