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.

During 2021, Michigan’s first year with online sports betting, Michigan sportsbook apps raked in a grand total of $3.7 billion in handle. Of that, operators together earned a total of $292.2 million in gross receipts and kept $110.6 million in adjusted receipts. They paid out $7.3 million in taxes to the state and $4.1 million in taxes to the City of Detroit.

Online casinos brought in total revenue of $1.114 billion for 2021, keeping $1.003 billion in adjusted revenue and paying out $201.7 million in taxes to the state along with $55.4 million to the City of Detroit.

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. Further, 2022 is shaping up to generate higher revenues for online gambling operators and greater tax revenue for the State of Michigan and the city of Detroit.

Michigan Combined Online Sports Betting And Casino Tax Revenue 2022

 

Michigan online gambling platforms brought in $209 million in taxes to the state and $59.5 million to Detroit in 2021. There has been a steady increase in monthly tax revenue since June. Online casinos paid out the majority of that tax revenue, representing nearly 98% of that total figure.

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. The first four months of online gambling made over $92.4 million in state tax revenue so far. So, 2022 is set to easily eclipse 2021 in terms of online gambling tax revenue.

In 2021, Michigan’s online casino industry paid $201.7 million in taxes to the State of Michigan along with $55.4 million to the City of Detroit, with a stable average of between $17 and $20 million per month to the state and between $3 million and $5 million to the city.

Michigan’s mobile sports betting industry paid out $7.3 million in taxes to the state and $4.1 million to Detroit in 2021, with upward growth. Once again, November was the most profitable month for sportsbook operators so far. November is often a noticeably profitable month for sportsbooks, possibly because of the major NASCAR races that occur during November.

While monthly online sports betting and online casino revenue have both increased in 2022, online casino figures continue the pattern of generating 93-99% of a month’s tax revenue.

Michigan Monthly Online Sports Betting Handle 2022

In 2022, online sports betting handle has steadily increased. In April 2022, sports betting handle was 49% higher than the previous April. This points to a slow summer season that is even higher than the earliest days of Michigan’s first peak season. So, the 2022 football season is expected to be even larger. It’s all pointing to a Michigan sports betting industry that still has room for significant growth.

Betting handle represents the total of all wagers placed at Michigan’s online sportsbooks for the month. For 2021, sports betting apps in Michigan took in a total of $3.7 billion in handle.

DraftKings Sportsbook, BetMGM, FanDuel Sportsbook continue to thrive as the most popular choices for online sports betting in the Wolverine State. Together, they accounted for more than 75% of the total handle in 2021.

DraftKings Sportsbook (Bay Mills Indian Comunity) saw the highest online betting handle at over $126.3 million in November. FanDuel sat at $115.2 million followed by BetMGM at $110.4 million for November.

Michigan Monthly Online Sports Betting Revenue 2021

 

The Michigan Gaming Control Board defines revenue as “Adjusted Gross Sports Betting Receipts.” That figure comes from Gross Sports Betting Receipts minus promo credits (welcome bonuses, pre-launch offers, and other free betting credits awarded to players).

Michigan’s sports betting brands utilized an aggressive customer acquisition strategy leading up to the January 2021 launch. All ten of the mobile sportsbooks that went live on day one offered pre-launch bonuses and new player promotions in some form.

With those promo credits subtracted from the Gross Sports Betting Receipts, Michigan’s mobile sportsbooks posted net revenue losses in both January and February. That figure moved into the black in March and remained there, with some fluctuation, through the summer.

2022 will follow similar patterns with a few key differences. First, the only negative months will be months with major events, like the 2022 Super Bowl. Sportsbook brands have already attracted their customers, so large promotions will be limited to major events. Second, November may be another standout month this year. This is part of the normal seasonal pattern of sports betting.

Finally, adjusted gross revenue will likely be less volatile. With committed customer bases and fewer extravagant promotions, sportsbooks will likely follow a smoother revenue pattern.

Michigan Online Sports Betting Tax Revenue

*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 2021, Michigan sportsbook operators, together, paid out $7.3 in taxes to the state and $4.1 million in taxes to Detroit.

Tax revenue collected from Michigan online sportsbooks has been on an upward trajectory since launch, with November nearly doubling the previous record of $927,575 set in June. However, November is often an outlier month. Its adjusted revenue and tax revenue can be unmatched by even March Madness.

Michigan Monthly Online Casino Revenue 2022

 

Michigan’s Gaming Control Board doesn’t report online casino handle like it does sports betting. However, online casino adjusted gross revenue still reveals its popularity and profitability. In the first four months of 2022, online casinos generated almost half of its total 2021 revenue. Online casino revenue isn’t seasonal like sports betting is.

So, online casino revenue has increased steadily as online casinos acquired more customers. Since online casino revenue is less volatile and reliably growing, it’s a more stable source of cash flow for online gambling companies and tax revenue for states.

Michigan Monthly Online Casino Tax Revenue

 

The state taxes online casino revenue using a tiered system, and all mobile casino operators pay between 20-28% of adjusted gross revenue for Internet Gaming State Tax Payment. The first four months of 2022 have already generated almost half of 2021’s state and city tax revenue. The steady growth that online casinos have enjoyed is translating to even more tax dollars for Michigan and Detroit.

Over the last six months of 2021, online casinos produced between $17-20 million in state tax revenue and $3-5 million for Detroit. In 2021, Michigan’s online casinos generated $201.6 million in tax revenue for the state and $55.28 million in tax revenue for Detroit.

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