Michigan Online Gambling Revenue: Sports Betting & Casino

As Michigan’s online sports betting and online casino gambling platforms continue to increase their handle month by month, Michigan remains one of the top iGaming markets in the country.

Michigan’s sportsbooks and online casinos grew by leaps and bounds in 2022. Michigan sportsbook handle was 30-50% higher each month in 2022 than in 2021. Sportsbooks’ adjusted gross revenue (AGR) was 53% higher in April 2022 than April 2021. May 2022 AGR was 127% higher than the previous May.

In five months, Michigan’s sportsbooks have already paid about 63% of the state and city taxes that they paid in all of 2021. This is shaping up to be a profitable year for Michigan’s sportsbooks.

Online casinos made just over $1 billion in 2021, and they’ve already made about 57% of that money in the first five months of 2022. Revenue and tax payments are already shaping up to be even more profitable in year two than year one.

Retail casinos in Detroit – MGM Grand Detroit (BetMGM), MotorCity Casino (FanDuel), and Greektown Casino (Barstool) – brought in a total of $1.267 billion in revenue for 2021. This was more than double the amount for 2020, but less than 2019’s record of $1.454 billion.

Most of Michigan’s internet gambling tax revenue came from online casinos. That pattern is continuing into 2022. It balances the seasonality of sports betting, too, maintaining a steady revenue stream.

Michigan Combined Online Sports Betting And Casino Tax Revenue 2022

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Michigan online gambling platforms brought in $209 million in taxes to the state and $59.5 million to Detroit in 2021. Online casinos paid about 98% of that tax revenue. That pattern has continued into 2022.

April 2022 set a new record for monthly state tax revenue, generating over $25 million in state tax revenue. May 2022 came close but didn’t quite beat April. The first five months of online gambling made over $117 million in state tax revenue so far. Barring another pandemic, 2022 online gambling tax revenue is set to eclipse 2021.

So far in 2022, Michigan’s online casinos have paid $112.4 million in taxes to the State and $30.8 million to Detroit. That comes out to about a $22.5 million tax payment to Michigan and a $6.1 million tax payment to Detroit each month.

In the first five months of 2022, Michigan’s mobile sportsbooks have paid out $4.6 million in taxes to Michigan and $2.6 million to Detroit. Online casinos still pay 93-99% of a month’s tax revenue. So, online casinos are Michigan’s major moneymakers.

Michigan Monthly Online Sports Betting Handle 2022

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In 2022, online sports betting handle has steadily increased. In April 2022, sports betting handle was 49% higher than the previous April. Even the summer season has grown year over year. So, the 2022 football season holds great promise for Michigan sportsbooks.

Betting handle is all the money that bettors wager at sportsbooks. For 2021, Michigan sports betting apps generated $3.7 billion in handle. So far in 2022, Michigan mobile sportsbooks have generated $2.1 billion in handle.

DraftKings Sportsbook, BetMGM, FanDuel Sportsbook generate 76% of the state’s online sports betting handle. So far in 2022, FanDuel Sportsbook (MotorCity Casino) has seen the most handle at $613 million. DraftKings Sportsbook (Bay Mills Indian Comunity) and BetMGM (MGM Grand Detroit) have both made around $475 million in handle.

So, Michigan’s sports betting industry is still dominated by the same three brands as most of the other American markets.

Michigan Monthly Online Sports Betting Revenue 2021

 

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The revenue figure that Michigan Sharp reports is Adjusted Gross Sports Betting Receipts or AGR. That figure takes the money left over after paying winnings and subtracting promo credits from welcome bonuses, pre-launch offers, and other offers.

With those promo credits subtracted from the Gross Sports Betting Receipts, Michigan’s mobile sportsbooks posted net revenue losses in January and February. Showing losses is normal for sportsbooks during major sporting events. February 2022 saw negative AGR because of all the Super Bowl promotions.

Sportsbook brands use major events to attract new customers. So, negative AGR in February should be unsurprising even in mature markets.

Michigan Online Sports Betting Tax Revenue

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*Tribal casinos pay 8.4% state tax; commercial casinos pay 5.88% state tax and 2.62% city tax.

2022 tax revenue should follow the same pattern as adjusted gross revenue. It’ll reach new highs in 2022 and is unlikely to see many negative values. In months with negative adjusted gross revenue, tax revenue can still be positive, like February 2022. While sportsbooks as a group can show losses, some sportsbooks can generate enough profit to pay taxes. This comes from various reliances on bonuses across Michigan’s sportsbooks.

In 2022, Michigan sportsbook operators paid $4.6 million in taxes to the state and $2.6 million in taxes to Detroit.

Tax revenue from Michigan online sportsbooks has steadily increased since launch. May 2022 is the first summer month to make a six-figure state tax payment. It shows how much sports betting handle has grown since summer 2021.

Michigan Monthly Online Casino Revenue 2022

 

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Michigan’s Gaming Control Board doesn’t report online casino handle like it does sports betting. However, online casino AGR still reveals its popularity and profitability. In the first five months of 2022, online casinos generated 57% of its total 2021 revenue. So, 2022 AGR is set to easily eclipse 2021.

Online casino revenue has also increased steadily as online casinos have acquired more customers. Online casino revenue isn’t seasonal like sports betting revenue is. So, its linear growth pattern is a higher and more reliable source of revenue for online gambling companies and tax revenue for states.

Michigan Monthly Online Casino Tax Revenue

 

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The state taxes online casino revenue using a tiered system. All mobile casino operators pay between 20-28% of adjusted gross revenue for Internet Gaming State Tax Payment. The first five months of 2022 have already generated more than half of 2021’s state and city tax revenue.

In the first five months of 2022, online casinos generated $112 million in state tax revenue and $30.8 million for Detroit. So, the future looks bright for online casino gaming in Michigan.

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