Michigan Online Gambling Revenue: $650 Million Revenue Projection In First Year

Michigan could become one of the biggest markets for sports betting and legal online gambling in the US. State gaming regulators hope for a late-2020 launch for online sportsbooks, casinos, and poker in the state. Online gambling revenue projections in Michigan are topping $650 million.

The state’s gambling laws, competitive tax rates, and unique retail casino industry set the stage for Michigan’s new gambling verticals to flourish. Michigan Sharp analysis of the state’s upcoming online gaming launch projects that Michigan operators could bring in $650 million in first-year revenue from sports betting and online casinos and poker.

That total includes a $400 million first-year projection for sports betting from combined retail and online revenue. Online casinos and online poker could bring in $250 million in revenue, and these totals sports betting and online gaming combined would yield $93.6 million in tax earnings for the state.

Our projections came forth through the analysis of several different sources. These figures include projections from Michigan lawmakers and financial agencies, as well as gaming revenue totals from Pennsylvania, New Jersey, the United Kingdom, and Denmark.

Other key factors to consider for Michigan’s online gaming launch include:

  • Attractive sports betting tax rates for gaming operators – Michigan will levy an 8.4% tax on sports betting revenue, applied to both retail and online sportsbooks. The state’s three commercial casinos pay an additional 1.25% city tax rate. By comparison, Pennsylvania taxes sports betting at 36%. New Jersey applies a 9.75% tax to retail sports betting, and 13% to online sports wagering revenue.
  • Potential for different brands – All Michigan retail casino brands can offer both online sports betting and online casino and poker platforms under state law. This includes three commercial casinos and 23 tribal properties, owned by 12 different tribes. With that many potential online brands in the mix, Michigan stands to offer a wide selection of options for both sports betting and casino gaming.
  • Prioritized launch – State lawmakers and the Michigan Gaming Control Board hope for a late-2020 launch for online gaming. This accelerated timeline could point to several different brands going live around the same time. Pennsylvania, by comparison, saw its mobile sports betting and casino products launch over several months.
  • Effect of COVID-19 on sports leagues – Our projections assume that the first year of sports betting operations for Michigan include something close to a full slate of sports. The immediate future for sports like NCAA football and basketball is unknown at this time, however.

Michigan Sports Betting And Online Gaming Projections

 Sports Betting Revenue ProjectionMichigan Sports Betting Tax Revenue Projection*Online Casino/Poker Revenue ProjectionMichigan Online Casino Tax Revenue Projection*Total Sports Betting and Online Casino/Poker Revenue ProjectionTotal Michigan Tax Revenue Projection
MichiganSharp$400 million$33.6 million$250 million$60 million$650 million$93.6 million
Rep. Brandt Iden$400-$600 million (approximate)$35-$50 million$200-$270 million
$50-$65 million$600-$870 million$100 million
Sen. Curtis HertelN/AN/AN/AN/AN/A$10-$50 million
Michigan Senate Fiscal Agency$120-$240 million$10-$20 million$120-$240 million$29-$62 million$240-$480 million$39-$82 million
Michigan Department of TreasuryN/AN/AN/AN/AN/A$19 million
Pennsylvania First-Year Revenue$152 million$12.8 million$241 million$57.8 million$393 million$70.6 million
United Kingdom October 2018-September 2019**$406.5 million***$34.1 million$618 million$148.3 million$1.024 billion$182.4 million
Denmark 2019**$447 million$37.5 million$623 million$149.5 million$1.07 billion$187 million
New Jersey First-Year Revenue$194 million$16.3 millionN/A****N/AN/AN/A

*Does not include 1.25% city tax for commercial casinos

**Gross Gaming Yield adjusted for Michigan’s population

***Online revenue only

****New Jersey’s online casinos began launching in 2012; Michigan Sharp feels this is too far in the past to make an accurate projection

Rep. Brandt Iden

State Representative Brandt Iden stands as one of the chief architects in Michigan’s expansion into legal online gambling and sports betting. Michigan Gov. Gretchen Whitmer signed off on a pair of bills in December 2019, which put the final pieces in place for the state to launch legal online gambling.

Whitmer’s signature on the Lawful Sports Betting Act and Lawful Internet Gaming Act put Michigan in position as one of five US states to legalize all three verticals of online casinos, sports betting, and poker. The predecessor to the two bills came in the form of a proposed internet gaming bill from Rep. Iden.

Iden told the Detroit News that he projects as much as $35-$50 million in first-year sports betting tax revenue. Sports betting revenue will be taxed at an 8.4% rate, putting Iden’s extrapolated estimate at roughly $400-$600 million for the first year.

Iden Projects Over $100 Million In Total Tax Revenue

Iden estimated that added taxes from online casino/poker revenue could bring the total first-year tax revenue from legal online gambling to over $100 million.

Online casinos and poker will be taxed at 20-28%, using a tiered system dependent on earnings. Using his prediction of an additional $50-$65 million for a revenue projection and a 24% tax estimate, Iden’s extrapolated first-year revenue estimate for online casinos and poker ends up at approximately $200-$270 million.

The estimates from Rep. Iden puts his projections at $600-$870 million in first-year overall combined revenue from sports betting and online casinos/poker.

Sen. Curtis Hertel

State Senator Curtis Hertel, like Rep. Iden, championed the cause that led to Michigan opening the door on sports betting and online gambling.

Without giving specific revenue estimates, Hertel predicted (in the same article from The Detroit News that included Iden’s projections) that the final parameters of Michigan’s sports betting and internet gambling bills could lead to $10-$50 million in tax revenue for the state.

The wide range indicated by Sen. Hertel’s projection doesn’t include a breakdown of the individual impact of sports betting or online gaming on that total.

Michigan Senate Fiscal Agency

Analysis from the Michigan Senate Fiscal Agency looks at hypothetical numbers that would result if sports betting increased overall state gambling revenue by 5-10%.

Those percentages put the agency’s sports betting revenue predictions at a range from $120-$240 million, yielding $10-$20 million in taxes for the state.

The Senate Fiscal Agency conducted a separate analysis on the potential for online casino and poker revenue, using the same measure of a 5-10% increase in state gaming revenue coming from online games.

That range of increase would produce another $120-$240 million in online casino/poker revenue and result in $29-$62 million in tax revenue for the state.

Combining these numbers puts the Senate Fiscal Agency’s projection ranges at $240-$480 in sports betting and online gaming revenue, yielding $39-$82 million in tax earnings for Michigan.

Michigan Department of Treasury

The Michigan Department of Treasury projected $19 million in annual tax revenue from sports betting and online gaming. That estimate didn’t get into a specific revenue breakdown of each of the new legal gambling verticals coming to the state.

The Department of Treasury’s projection came via a press release from Gov. Whitmer’s office, which lauded the positive effect of legal gambling tax revenue going to the state’s School Aid Fund and First Responder Presumed Coverage Fund.


Michigan’s new gambling verticals create a market that should resemble Pennsylvania’s, which took a similar path to legalization. Online sports betting and online casinos/poker just finished up the first full year of operations in Pennsylvania.

Land-based sports betting went live in Pennsylvania in November 2018, and the first of the state’s online sportsbooks launched in May 2019. With online sportsbooks added, Pennsylvania took in $152 million in sports betting revenue from May 2019-April 2020.

Online casinos debuted in Pennsylvania in July 2019, and the launch of PokerStars PA in November 2019 added online poker to the list of mobile gaming offerings. From July 2019 through June 2020, combined revenue for sports betting and online casinos/poker ($241 million) in Pennsylvania came in at just over $393 million.

Pennsylvania’s 13-million population is about 33% larger than Michigan’s 10 million. A few key factors could push Michigan’s gaming revenue earnings past Pennsylvania’s.

Michigan In Position To Top PA Revenue Numbers

Sports betting and online gaming in Pennsylvania started slow, with just $76.5 million of that $393 million figure coming from 2019 revenue. The state’s expanded gambling offerings have surged in 2020, however.

Michigan could be in a position to come out of the gate stronger than Pennsylvania did in its first few months of sports betting and online gaming. Pennsylvania’s online sportsbooks and casinos debuted individually and somewhat slowly.

Michigan could realize stronger first-year numbers with a synchronized launch of online products. All commercial and tribal casinos have the green light to offer online gaming in Michigan, which potentially puts more than 20 different online brands in the hands of Michigan players.

Gaming tax rates in Michigan also present a much more favorable situation for potential operators versus Pennsylvania.

Michigan will tax sports betting revenue at 8.4%, with the state’s three Detroit-based commercial casinos playing an additional 1.25% city tax. Pennsylvania, by comparison, taxes sports betting revenue at 36%.

Pennsylvania taxes online table games and poker at 16%, and online slots at 54%. Michigan will tax all online casino/poker revenue at 20-28%, using a bracket tier system.

Michigan’s gaming revenue tax laws provide a much more favorable situation for casino operators. The state’s 23 tribal casinos can compete for market share, and Michigan could end up offering more online gaming options than any other US state.

United Kingdom & Denmark

MichiganSharp analyzed online sports betting and casino revenue from the United Kingdom and Denmark to further narrow down our Michigan projections. The success of these mature online gaming markets could give a glimpse as to what’s in store for Michigan’s online gambling expansion.

For the 12-month period of October 2018-September 2019, Gross Gaming Yield from online sports betting in the UK totaled £2.1 billion ($2.71 billion). Online casino GGY for the UK from that same period equaled £3.2 billion ($4.12 billion).

Adjusting these figures from the UK Gambling Commission for Michigan’s population yields a potential $406.5 million revenue figure for online sports betting, and $618 million for online casino/poker.

The adjusted figures (converted to US dollars and adjusted for Michigan’s population) from Denmark for 2019 convert to a possible $447 million in online sports betting revenue, and $623 million from online casino gaming.

Michigan’s first-year totals for online casino revenue might not reach these marks, but the figures from the UK and Denmark give a glimpse of long-term potential in the Wolverine State. The overall trajectory of the US sports betting industry leads us to believe that Michigan’s first year in the market could yield similar numbers to the UK and Denmark.

New Jersey

Like the UK and Denmark, the maturity of New Jersey’s online casino market makes it tough to make a first-year projection for Michigan from New Jersey numbers. Sports betting functions as a relatively new market for the Garden State, however, with both retail and online wagering launching in mid-2018.

Taking a look at June 2018-May 2019 offers numbers from the first 12 months of New Jersey’s legal sports betting market. Retail and online sportsbooks combined brought in just under $194 million, according to figures from the New Jersey Division of Gaming Enforcement.

New Jersey’s population (8.9 million) and sports betting tax rates (9.75% on retail and 13% for online) represent close figures to Michigan in those categories. Like Pennsylvania, it took several months for New Jersey to get to where it stands now, with nearly 20 different online sportsbook brands.

If Michigan can roll out a synchronized online sports betting launch, first-year sports betting numbers could eclipse both New Jersey and Pennsylvania.

About the Author

Geoffrey Fisk

Geoff Fisk is a San Diego-based freelance writer, specializing in the poker and gambling industries. He’s written for numerous platforms and has traveled the globe as a live poker tournament reporter. Geoff’s interests include the legal online poker industry in the U.S. and abroad.