Michigan Roars Out of the Gate Online With Sensational Sports Wagering February
- Michigan’s first full month of online sports wagering set record revenue performance
- No doubt adding online gaming made an impact difference, aiding both Detroit & the state
- Analysts believe Michigan will continue to be a Top Five US market past the initial stage
No one counting figures for sports wagering in Michigan will assume March will come in like a lamb after tabulating February.
Earlier this week the Michigan Gaming Control Board (MGCB) reported the state’s licensed operators generated $89.2 million in gross gaming receipts (GGR) for the previous month. That record number comes after the state’s online gaming operators posted $42.7 million in gross revenues for January. Operators were only online for a partial ten days at the end of that month as Michigan began online gaming.
In February, the 11 online casino providers totaled more than $79.7 million in gross receipts leading Michigan to receive $14 million. The 12 mobile sports betting apps reported gross receipts of nearly $9.5 million. With an adjusted loss of $10.8 million, the state still was able to receive more than $142,000 in tax revenue.
The one figure to remember is Michigan sports bettors combined for a total handle of nearly $301.9 million in February, indicating the highest “first month total” achieved for any state.
By the Books
Not surprisingly, the top three sportsbook operators in Michigan were the same as those that have been sharing the title in many other US states. Also, not surprising, is that two out of three experienced a financial loss during February, which affects many sportsbooks due to the heavy amount of new sign-up bonuses and promotions they offer as the cost of doing business within their first month getting started in a new market.
FanDuel led the way in Michigan with more than $87.2 million in wagering handle. BetMGM was second with an impressive $75.7 million handle after finishing second the previous month. Closely behind them was DraftKings Sportsbook with $73 million.
As anticipated, FanDuel reported an adjusted loss of almost $5.4 million in February with DraftKings recording an adjusted loss of $5.1 million. Somewhat surprising, BetMGM was able to report positive receipts and gross gaming revenue of $5.3 million and adjusted receipts totaling $2.4 million.
Online Gaming the Major Difference
The three Detroit casinos still operate at reduced in-person capacity because of COVID-19. Their tax payments to the city for slot machines and table games were $10.2 million last month, equating to nearly 30% less than in February 2020.
But thanks to revenues from online gambling available in 2021, which includes both online casino and online sports wagering, none of which was yet offered in February 2020, the casinos ended up contributing about $200,000 more in taxes to the city of Detroit last month than they did a year earlier at full capacity.
The online gaming difference could help to ease financial pressure on Detroit later in the year. Before the pandemic, wagering taxes were the third-largest revenue source in Detroit’s general fund at more than $180 million a year.
In a published statement, Richard S. Kalm, Executive Director of the MGCB said that despite the snowy and cold February, residents and visitors of Michigan showed strong interest in internet gaming and sports wagering. Furthermore, he acknowledged that internet gaming taxes in February have tripled. However, according to Kalm, this is not unexpected, considering that this is the first full month of gaming in the state.
Looking beyond their initial early enthusiasm stage for sports wagering, many analysts believe there is every reason to assume Michigan will be counted among the top five markets in the US continuously this year.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
Email: [email protected]