How Does Legal Online Gambling In Michigan Compare To Other States

With the recent introduction of online gambling in Michigan, the state is a virtual clean slate when it comes to online casinos, sports betting, and online poker. Although a handful of other states also offer these options, how does Michigan compare? What can players in Michigan expect from Michigan’s interactive gaming products, and how does online gambling in Michigan compare to other US states with legal online gaming?

How Does Michigan Compare In Terms Of The Amount Of Things You Can Legally Bet On Online?

Michigan shares the same level of online gaming as states such as New Jersey and Pennsylvania. Not only does Michigan offer online sports betting, but they also offer online poker, online casinos, and daily fantasy sports.

New Jersey and Pennsylvania are considered the first states to go all-in on widescale online gaming expansion, with Michigan projected as the next major US online gambling hub. Michigan might also permit betting on esports.

Most states in the midwest US, such as Illinois and Indiana, are taking a measured approach to online gaming. Illinois legalized online sports betting but did not add online casino games or online poker to their final law.

Due to the coronavirus, Illinois Gov. J.B. Pritzker circumvented a law that requires bettors to register their online account at a casino. Now, players can create their betting account online.

Indiana and Colorado followed Illinois’ lead and only legalized online sports betting as well. Colorado’s sports betting market could grow large as lawmakers laid the groundwork for up to 20 online sportsbooks to go with the state’s 31 casinos. Sports betting launched in Colorado on May 1, 2020, making it slightly ahead of the implementation in Michigan.

Tennessee lawmakers passed legislation to legalize online sports betting in May of 2019. Online sportsbooks launched in the Volunteer State on Nov. 1, 2020.

How does Michigan compare in terms of tax rate and the license fee?

Tax Rate-8.4% tax rate for sports betting and DFS sports at tribal casinos, 11.4% for three Detroit casinos
-20-28% tax rate on online gaming based upon a casino’s total online revenue
License-$50,000 application fee, $100,000 for license and $50,000 annual fee for sports betting operators
-$20,000 operating license, $5,000 annual fee for DFS operators
Products LegalizedOnline Casino, Online Poker, Online Sports Betting, Daily Fantasy Sports

How Michigan Sports Betting Tax Rate Compares To Other States

Michigan’s tax rate of 8.4% on sports betting revenue at tribal casinos ranks among the lowest in the nation. States like New Jersey and New York, with an 8.5% tax rate on land-based bets, share a similar taxation level.

Compared with states like Illinois, who set a tax rate of 15%, and Tennessee, with one of the largest rates at 20%, Michigan operators are pocketing more money. The highest rate of the larger states where sports betting is legal continues to be Pennsylvania. The state set its tax rate at a whopping 34% of all betting revenue.

Michigan’s legal online sportsbooks include platforms from FanDuelDraftKingsFOX Bet, and BetRivers.

Michigan’s Licensing Fee

If you are a casino in Michigan hoping to offer online gaming to customers, you must pay a fee once you are granted a license. Then, you must also cover an annual fee to keep the license.

For an online gaming license in Michigan, operators pay $50,000 for an application fee, $100,000 for the five-year license, and another $50,000 for the annual operating fee.

Michigan launched online casinos in January 2021. Legal iGaming products in the state include mobile casino apps from e FanDuelDraftKingsBetMGM, and several other brands.

For DFS sites, the fees remain relatively low. The license to operates a daily fantasy site costs $20,000 for the license and $5,000 for the annual fee.

For sports betting operators, Michigan does not command the money that Illinois’ betting law demands. In Illinois, operators pay a percentage of their yearly gross revenue as the fee, up to $10 million in total.

Does Michigan Make It Easy Or Hard To Sign Up For An Online Gambling Account?

The Michigan Gaming Control Board set regulations that allow players to register for online gaming accounts remotely, with no trip to a land-based casino required. This ease of entry to Michigan’s iGaming products plays a crucial role in the potentially massive Michigan market.

Some states, such as Illinois, required an in-person visit to a casino before the bettor could place a wager online. But Illinois temporarily paused that stipulation in the wake of the coronavirus pandemic.

Illinois’ online bettors now just need to log onto their favorite gaming app to create a betting account. This departure from the in-person registration requirement plays a key factor in Illinois’ ascendance as a top US sports betting market.

With Michigan tying casinos to online operators, it wasn’t a stretch to assume that the state might follow Illinois’ initial blueprint for opening an online account. The MGCB went forth without an in-person sign-up mandate, however.

Regulators in Michigan make it easy for residents and visitors to bet on their mobile devices by making registration untethered to a casino visit.

Who Can Offer Online Gambling In Michigan?

All online gaming licenses granted in Michigan must be tied to a casino or online gaming provider. For example, DraftKings recently partnered with Bay Mills Resort & Casino to run their in-house casino sportsbook. The agreement also gives DraftKings the freedom to operate an online sportsbook under the Bay Mills license.

One of the interesting twists for an operator granted a license in Michigan is the ability to partner with two different brands. As mentioned before, operators can partner with a casino, but they can also enter into an agreement with an exclusive online gaming company.

The only exception to the casino rule in Michigan concerns daily fantasy sports. Providers of DFS games do not have to partner with a casino to offer their products. DFS powerhouses such as DraftKings and FanDuel both provide online sportsbooks and online casinos in Michigan, but only the sports betting and casino products are required to operate in partnership with land-based casinos.

In other states, such as New Jersey, land casinos also must partner with online casinos. The same holds true in Illinois, where casinos and racetracks work with online sportsbooks such as BetRivers and DraftKings.

Michigan joins New Jersey and Pennsylvania as the only three states to offer DFS, online sports betting, online casino and online poker. While Michigan slowly ramps up to widespread gaming expansion, the other two states have enjoyed the large revenue source from all four gaming options.

By following the blueprint of New Jersey and Pennsylvania, Michigan becomes the only state in the Midwest to offer all four online gaming categories.

Are DraftKings And FanDuel Active In Michigan?

DraftKings and FanDuel both partnered with casinos in Michigan to offer online and physical sports betting. DraftKings acts as the sports betting partner of Bay Mills Casino, while FanDuel operates retail and online sports betting in a licensing agreement with MotorCity Casino.

Since both companies have partnerships with casinos, they can brand the on-site sportsbook at each casino with their signage and marketing materials. The two companies will receive revenue from both their online sportsbook and through the in-person sportsbook.

FanDuel Partners With Motor City Casino For In-person Sportsbook

FanDuel set their sights on one of the three Detroit casinos with their partnership as the gaming company agreed to a deal with MotorCity Casino. The two-story FanDuel branded sportsbook at MotorCity features betting kiosks, dozens of high-definition televisions, and a VIP area.

MotorCity Casino is owned by a member of the Ilitch family, who runs the Detroit Tigers and Detroit Red Wings.

Partnering with one of the three Detroit casinos allows FanDuel to seize a large share of a market in a city with close to 10 million citizens. The gaming company complements its sportsbook with an online casino and online sportsbook in Michigan.

DraftKings And Bay Mills Resort & Casino Partner For Sports Betting

In early June 2020, DraftKings announced a partnership with the Bay Mills Resort & Casino. Located in the state’s upper peninsula in the city of Brimley, the casino brands its in-house sportsbook with DraftKings promotional materials.

DraftKings also operates an online casino in Michigan under the agreement with Bay Mills Casino.

FAQs – Michigan Gambling

What kinds of online gambling are legal in Michigan?

Michigan offers legal online casinos, online poker, online sports betting, and daily fantasy sports.

FanDuel and DraftKings are the two largest daily fantasy sports providers in Michigan. Both companies feature an outstanding mobile app and an extensive website for customers to build their virtual rosters. Both companies also have partnerships with Michigan casinos to operate online sports betting and casino gaming.

What is the tax rate for online sports betting in Michigan?

The tax rate for Michigan’s online sports betting is 8.4% for tribal casinos and 11.75% for the three Detroit casinos. While other states feature two different tax rates for online and land-based betting, Michigan’s rate remains uniform for all forms of wagering.

Online sports betting in Michigan launched on Jan. 22, 2021. Online casinos went live on the same day, and the state’s synchronized approach to the debut of online gaming made Michigan’s iGaming launch the most successful in US history.

What is the tax rate for online casinos in Michigan?

The tax rate for online casinos in Michigan runs from 20%-28%, depending on the casino’s total revenue from online gaming. The variable rate is based on the casino’s AGR or adjusted gross revenue.

The 20% rate goes into effect for casinos with an AGR of $4 million or less over a calendar year. Casinos with an AGR topping $12 million annually face the higher 28% tax rate.

What is the tax rate for online poker in Michigan?

The tax rate for online poker in Michigan is between 20%-28% for operators. The sliding scale for online gaming in the state is based upon the casino’s AGR, known as adjusted gross income.

All operators who offer online poker or online casino games are subject to the variable tax rate. For casinos that make under $4 million per year, they will be taxed at the 20% rate. Operators must break the $12 million threshold in AGR before facing the maximum 28% taxation rate.

Who can obtain a license to run an online gaming site in Michigan?

Any of the three Detroit casinos or the 12 tribal group that own casinos in Michigan are eligible to obtain a license for an online gaming site. Most casinos will use the assistance of an online operator to run their online poker, online casino, or online sports betting services.

Casinos must pay an application fee, licensing fee, and annual operating fee to gain and hold onto the five-year license. Licensing runs through the Michigan Gaming Control Board.

Is DraftKings offering sports betting in Michigan?

Yes, DraftKings is partnering with Bay Mills Resort and Casino for online and in-person sports betting. The partnership allows DraftKings to offer an online sportsbook, as well as a retail sportsbook inside the Bay Mills casino.

DraftKings offers Michigan bettors the ability to wager on sports from anywhere within the state.

Is FanDuel offering sports betting in Michigan?

Yes. FanDuel Sportsbook launched in Michigan on January 22, 2021. FanDuel is partnered with one of the three Detroit casinos, MotorCity Casino, to provide in-person betting and an online sportsbook.

The FanDuel Sportsbook app gives Michigan players the opportunity to wager from anywhere within Michigan borders.

About the Author

Amber Hoffman

Amber Hoffman is Managing Editor of MichiganSharp.com. A recovering attorney, she's spent almost a decade developing and managing websites and writing for a variety of industries. Amber became a Cubs fan after living a handful of blocks from Wrigley Field, much to the chagrin of her Mets-loving family and Red Sox-loving husband. Amber writes for a number of online sites including the food and lifestyle site Food And Drink Destinations.