Michigan's internet betting revenue takes off
Michigan's foray into legal online gambling continues to gain momentum, even exceeding the high expectations that surrounded the launch of internet sports betting and gaming earlier this year.
The state's internet gaming operators brought in $95.1 million in receipts in March, the second full month of legal online gambling in the state.
“Online casinos are on pace to earn $760 million in revenue this year, and that’s a staggering number," analyst Geoff Fisk of MichiganSharp.com said in a statement Tuesday. "I think that figure shatters even the loftiest expectations for Michigan’s online casinos.”
PlayMichigan.com, which covers the state's gaming industry, said that Michigan is just the third state to generate more than $90 million in online casino and poker revenue in a single month. The state was the country's third-largest online casino market in March, behind only New Jersey and Pennsylvania.
Meanwhile, operators of internet sports betting platforms reported a total handle — the amount of money wagered — of $359.5 million and gross sports betting receipts of $32.3 million for the month, according to numbers released by the Michigan Gaming Control Board.
Richard Kalm, the board's executive director, said in the statement that March Madness likely fueled the 19.1% jump in the sports betting handle from February to March. He noted, too, that monthly adjusted gross receipts tied to internet gaming rose 18% from February.
"This led to increases in taxes and payments, which means more funding for the city of Detroit, K-12 education, economic development and tribal communities," he said.
Already, the state is approaching $1 billion in lifetime handle from online and retail sports betting, according to PlayMichigan.com.
"With nearly $1 billion in lifetime bets now, it's hard to (overstate) just how unprecedented Michigan's gaming expansion has been so far," Dustin Gouker, an analyst for PlayMichigan.com, said in a statement. "The growth in online casino gaming has been off-the-charts. No other state has enjoyed a launch of online casino gaming and sports betting quite like this."
Sportsbooks collected nearly $384 million from both online and retail (in-person) sports betting in March, up 17.8% from February, according to PlayMichigan. The site reported that only New Jersey, Nevada, Pennsylvania and Illinois have collected more in a single month, and none has generated such a large amount so quickly after launching internet sports betting.
Taxes tied to online gambling are based on adjusted gross receipts. In March, those receipts totaled $88.7 million for internet gaming and $19 million for online sports betting, according to MGCB.
Operators paid about $17.8 million in taxes and payments to the state last month, with the vast majority of that coming from internet gaming revenue.
Meanwhile, the city of Detroit received $5.2 million in wagering taxes and municipal services fees from the two forms of online gambling last month. Internet gaming taxes and fees made up $4.9 million of the total.
The operators of Michigan's tribal casinos that offer online gambling reported $1.8 million in wagering payments to the tribes' governing bodies, according to the state.
PlayMichigan noted, however, that promotional credits "continue to dampen the state's take," as free play incentives operators offer to bettors are deducted from the receipts that are used to calculate taxes.
“The summer months will likely end up being more fruitful for the state, even as betting predictably slows with a lighter sports calendar," PlayMichigan.com analyst Matt Schoch said. "If tax revenue remains lackluster, however, it could grow into a larger issue that may need to be fixed going forward.”
Online gambling launched in Michigan in mid-January. As of March, 12 operators were authorized to offer one or both forms of online gambling.
On the internet gaming side, BetMGM — the platform tied to the MGM Grand Detroit casino — led the pack with nearly $30.8 million in gross receipts in March.
On the online sports betting side, Detroit's MotorCity Casino Hotel and platform provider FanDuel led the month with a total handle of nearly $107.2 million, while BetMGM had the most gross receipts, with more than $8.7 million.
MGCB last week reported that Detroit's three casinos generated nearly $114 million in revenue from on-site betting options such as table games and slots in March.
Casinos in the state were permitted to reopen at the end of last year after an extended shutdown but have been operating under capacity limits and other pandemic-related restrictions.