Michigan Online Casino Industry Treading Water Like Rest of US

Michigan Online Casino Industry Treading Water Like Rest of US

For the third consecutive month, Michigan has proven it’s not immune to the summer sports slowdown. However, the Wolverine State’s year-over-year growth continues to show other jurisdictions that its US online casino segment is one of the best in the business. 

But despite low revenue numbers and false claims of cannibalization, the Michigan online casino market has proven it’s a valuable economic resource. 

How Michigan online casinos are looking

The Michigan gaming market consisting of MI online casinos and poker, fell 4.6% from May to June. In June, internet gaming generated $121.5 million in revenue as opposed to the $127.4 million recorded in May. 

Other data from the Michigan Gaming Control Board includes:

$22.5 million in state taxes
$9.5 million in taxes to local entities
BetMGM online casino is top generator with $47.2 million

Sports betting in Michigan also experienced a new low in June, reporting $292.4 million in handle, down 18% from May. However, sports betting’s year-over-year growth is up 12.7% from June of 2021.

$292.4 million in handle ($270 million online)
$15.8 million in revenue ($15.4 million online)
$367,487 in state taxes
$223,067 in taxes to local entities

Common occurrence across US casinos

States across the US are experiencing the same summer slump as Michigan. Jurisdictions in the Midwest, including Indiana, Illinois, and Iowa, have all experienced a slight decrease in gaming revenue and sports betting handle. 

By comparison, Michigan’s 18% slide from May to June is on par with other markets in the US.

May to June decreases in other US gaming markets:

Pennsylvania: 20%
Oregon: 19%
New York: 17%
Indiana: 17%
Iowa: 17%

No cannibalization for Michigan retail casinos

There are six states with online casinos; Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia.

Retail casinos constitute a significant revenue stream for some states, and early fears were that online casinos would cut into profits. However, that has not been the case. 

Andrew Winchell, director of government affairs at FanDuel, said states now understand the benefits of internet gaming. 

“I think that the states understand that it is a boost for the land-based properties and a boost for the state and tax revenue, and it doesn’t cannibalize the retail market. It just helps grow the market and also grow the sports betting market at the same time. The two do have a synergy for customers to go back and forth between the two sides.”

State coffers are certainly happy because, in addition to retail taxes, the government receives online gaming taxes as well. 

In 2019, Detroit’s three commercial casinos generated $117.8 million in state tax revenue and $184.2 million in city/local taxes. 

Fast forward to 2021 – when Michigan online casinos went live – and numbers show additional revenue heading to state coffers. That year, retail casinos added $102.6 million in state taxes and $160.8 million in city/local taxes. Online casinos contributed an additional $112.1 million in online casino state taxes and $55.3 million in city/local taxes. 

Through the first five months of 2022, over $60 million in state tax revenue have been generated from online casinos.

Economic value from MI online casinos

Nearly $480,000 in grants has been awarded for six community projects in Michigan, according to the Native American Heritage Fund (NAHF), which is supported by state gaming revenue. 

The winners include:

Chippewa Hills School District: $52,371
Hartford Public Schools: $132,249
Lansing School District: $87,500
Michigan’s College Access Network: $55,000
Native American Affairs Council: $12,295
Saranac Community Schools: $139,318

Grant funding goes to support several different community projects. However, this year priority was given to schools looking to rebrand and move away from Native American imagery. 

In a statement, NAHF Chairperson Jamie Stuck had this to say:

“If we fund the decommissioning of racist mascot imagery now, we will have more money in the future for proactive program and curriculum programming.”

As a whole, Michigan’s online casino and sports betting industries are performing equal to or better than other jurisdictions in the US. As the summer months come to a close and the 2022 NFL season approaches, expect numbers to increase once more.

Author: Tyler Gutierrez