10 Big Questions About Michigan Online Gambling At The 6-Month Mark
It's been six months since Michigan launched its online gambling experiment. The state's online casino market has performed well, but the half-year return on MI online sports betting has been less lucrative for state coffers.
Michigan has seen a rise in online gambling revenue since the expansion of the law. Online gambling has raised $119.9 million in the first five-plus months. Internet gaming operators have netted $483.1 million. Sports betting has brought $2.6 million for the state and $1.5 million to Detroit.
Michigan's online gambling market has been open for 6 months. The state has collected $25 million in annual state tax revenue. It's expected to generate $100 million by July. The launch of the online market is 6-months-old. Michigan's governor signed the legislation in December 2019.
The launch of Michigan online casinos has seen a good start.
The delay in launch for all of 2020 may have worked in Michigan's favor. The well-funded operators started TV ads early. Michigan had all the industry's the major players ready to launch on Jan. 22. New Jersey and Pennsylvania had some small operators launch first.
The coronavirus pandemic forced people to stay home for large parts of 2020. The delay in launch for all of the 2020 may have worked in Michigan's favor. New Jersey and Pennsylvania had all the industry's the major players ready to launch on Jan. 22.
Michigan operators have taken nearly $1.5 billion in online sports bets since launch. The state is behind New Jersey, Illinois, Nevada and Pennsylvania. Michigan has fewer people than IL and PA, but more people in the state than NJ. Football is king for sports betting in Michigan. Detroit's sports scene is struggling. The Pistons, Red Wings and Tigers are in a slump. It's hard to have an accurate read on where Michigan stands without a football season to run up the score.
FanDuel Sportsbook is America's most popular online sportsbook in Michigan. DraftKings Sports and BetMGM are neck-and-neck for the second spot in internet gaming revenue. BetmGM has 36.3% of the internet gambling market share in the state. It is in a competition with Draft Kings for No. 2 spot.
There are three sports betting brands in Michigan that are tied to Detroit's commercial casinos. They took $966.5 million in bets from launch through June. The other 10 active sports brands are ties to tribal operators. Through June, the tribal brands took in $532.7 million.
DraftKings, Golden Nugget, PointsBet, TwinSpires and WynnBET have combined to take $447.5 million in sports bets and $132.0 million of internet gaming revenue in the Upper Peninsula. In the Lower Peninsula, FireKeepers, Four Winds and Play Gun Lake launched last week. West Michigan brands have only made $9 million from sports betting so far.
The allocation of tax revenue falls out of two separate pies for online sports betting and internet gaming. For sportsbetting, 30% of revenue from Detroit operators will go to the city. 5% will be allocated to Michigan agriculture equine industry development fund. The remaining 10% goes to a Michigan strategic fund and a state school aid fund for tribal operators. For tribal casinos, 20% is given to local tribal government of the casino licensee, 10%, to state’s strategic funds, and 70% to internet gambling fund, which also collects 90% tribal tax revenues.
Soaring Eagle and Play Gun Lake sports betting are launching in Michigan. The industry will focus on when the state will enter into compacts for interstate poker play. Live-dealer studios are being constructed in the Detroit area. Once they are approved, Michigan’s online casino industry could see another period of growth.
Tilman Fertitta is increasingly popping up on television screens in Michigan. WynnBET signed a partnership with the Detroit Lions and is willing to spend in the state before football season. Barstool Sportsbook should have a bounce-back in sports betting. The tribes that have gone with self-branded products are fascinating case study to watch for observers and gambling stakeholders across the country.