Online gambling notches $42.7M in gross receipts over first 10 days
Michigan's online casino receipts and total sportsbook handle set national first-month records with just 10 days of legal internet gambling, as the state said operators' gross receipts totaled $42.7 million.
Online casinos and poker represented more than half those receipts with $29.4 million — more than any other state for their first month, according to PlayMichigan, which covers the state's gaming industry. Meanwhile, record wagers of $150.8 million for in-person and online sports betting surpassed Tennessee's first-month benchmark of $131.4 million set in November.
Michigan benefited from more operators than other states from the get-go and good timing. Its results position it to become one of the country's largest and busiest for legal internet gambling, according to experts.
“There is no questioning the power of online sports betting at this point,” Matt Schoch, analyst for PlayMichigan.com, said in a statement. “January was just a snapshot, but online betting will eventually account for 90% or more of the state’s total handle, which would put it much more in line with other legal jurisdictions that offer both online and retail betting.”
Online sports betting operators drew $13.3 million in total gross receipts. There were $115.2 million in wagers, which accounted for 76.3% of the state’s January handle, despite the Jan. 22 launch. That is almost as much as Michigan’s entire $130.8 million retail handle during 2020, a total hampered by pandemic-related restrictions on brick-and-mortar casinos.
Casinos are hopeful online gaming will prove a lucrative substitute as COVID-19 continues to spread. MotorCity Casino Hotel's partner, FanDuel, topped the market with $32.6 million in first-month wagers, but just $622,372 in gross receipts. DraftKings with Bay Mills Indian Community was second with a $28.2 million handle and $3.4 million in gross receipts. BetMGM with MGM Grand Detroit's $22.8 million handles led to a market-topping $5.1 million in gross receipts.
Greektown Casino-Hotel owner Penn National Gaming Corp.'s Barstool-branded app, Bet Rivers, reported a $27.5 million handle with $3.3 million in gross receipts.
The launch of online gambling benefited from several major sports events. During its first weekend live — the results when combined with Virginia, where internet gaming also went live during the same week with two operators — combined for 25% of the U.S. online gaming market during the weekend of the NFL conference championship games.
“The circumstances for Michigan’s online launch could not have been better ahead of two of the biggest sports betting holidays of the year,” Dustin Gouker, analyst for PlayMichigan.com, said in a statement. “Ultimately, it’s a small sample size, and the results of which are less important than sportsbooks launching and engaging sports bettors and setting the groundwork to flourish for years. By that metric, Michigan’s launch was a success.”
The Michigan Gaming Control Board had 11 approved operators for online gambling, including 10 for sports betting — more than any other state has had at launch.
“Internet gaming operators are off to a good start in Michigan,” Richard Kalm, the state control board's executive director, said in a statement. “The taxes and payments from online gaming will provide funding for K-12 students, the city of Detroit and Michigan tribal communities.”
The state of Michigan received $4.4 million in taxes and payments from all online gambling. Most — $4.3 million — are coming from online casinos and poker. Just $111,696 comes from online sports betting after a promotion-heavy debut whittled taxable revenues to a combined loss of $5.2 million.
The three Detroit casinos reported city wagering taxes and municipal services fees of $1.379 million for January, including $1.315 million for internet gaming and $64,024 for online sports betting.
The state receives 70% of the total tax from commercial operators and 80% of the total payment from tribal operators for internet gaming. The tax and payment rate ranges from 20% to 28% based on yearly adjusted gross receipts.
For internet sports betting, commercial operators pay 70% of the 8.4% tax to the state and 30% to the city of Detroit. Tribal operators make an 8.4% payment to the state on adjusted gross sports betting receipts.
Tribal operators reported $428,615 of wagering payments to the tribes' governing bodies.