While 2020 was the first year in which sports betting was legal in Michigan, it was 2021 when it became available not only in brick-and-mortar casinos, but also online.
The numbers generated last year give every indication that Michigan sports bettors fully embraced the opportunity. According to the Michigan Gaming Control Board, Michigan bettors wagered $3.6 billion on internet sports wagers in 2021, resulting in $292 million in gross revenue and $7.3 million in betting for the state. That’s in addition to $310.6 million wagered on sports inside casinos (up from $130.7 million in 2020), which generated $27.3 million in gross revenue and $1 million in state wagering taxes.
The busiest month for sports bettors was last December, coming in at a whopping $514.7 million wagered. Christopher Boan, an analyst with Gambling.com Group, says the primary factor in December’s heavy activity was the stretch drive of the National Football League season. “The last few weeks of the season, the NFL is king,” Boan says. “It’s the home stretch, the playoff seedings are being determined. And even in Michigan, where you have one of the worst teams in the NFL, people are going to be watching.”
Boan acknowledges the state did a good job allocating licenses to operators. Michigan law requires that all sports betting, both retail and online, be handled by established operators and licensed by the state. The operators who obtained licenses in Michigan were the three Detroit casinos, in addition to 11 different Indian tribes that operate their own casinos.
Even so, licensed operators work in partnership with operators outside the state, such as DraftKings and Caesars, so not all the money that’s wagered will necessarily stay in Michigan. The taxes earned by the state and other governmental units, however, are revenues they would not otherwise have had.
Jake Miklojcik, a gaming expert and president of Michigan Consultants in Lansing, says multiple parties get a cut of online sports betting revenue.
“Every winning bet has 5 percent to 10 percent that goes to the house, and then expenses are taken out in some way, and the state and city get a portion of that,” Miklojcik says. “So, if you make a $100 bet and win, if it’s an even bet, you might get $90 back plus the $100 (for a total of $190). The extra $10 might go to the operator, and there’s an agreement to provide so much money to the state.”
The casinos have all opened sports bar-type venues to encourage people to come in and do their betting on-site, in the hope of generating additional revenue from other offerings. But as the numbers show, most of the sports betting in Michigan is now online, which means the casinos will mainly benefit from their percentage as the licensed operators.
Boan believes Michigan’s first-year performance positions it to become a top-five market for sports betting. “It’s a die-hard sports state,” he says.