Michigan and Virginia Launch Sports Betting

Last week, Michigan and Virginia launched sport betting, just in time for the NFL Super Bowl. In addition, Michigan’s 10 casinos and their partners also debuted online casinos in the state. The Michigan Gaming Control Board said additional approvals were expected in the near future. In Virginia, FanDuel got a head start because of its relationship with the Washington Football Team.

Michigan and Virginia Launch Sports Betting

Two major states last week joined the list of U.S. jurisdictions that conduct legal sports betting. Michigan and Virginia launched wagering late last week—just in time for the four remaining National Football League teams to battle it out for a spot in Super Bowl LV.

The Michigan Gaming Control Board announced 10 casinos and their online platform partners were approved to launch online gambling and sports betting. The 10 casinos/tribes and their partners include:

  • BetMGM (MGM Grand Detroit)
  • BetRivers (Little River Casino Resort)
  • DraftKings (Bay Mills Resort)
  • FanDuel (MotorCity Casino)
  • Golden Nugget (Ojibwa Casino)
  • TwinSpires (formerly BetAmerica, partnered with Island Resort & Casino)
  • William Hill (Turtle Creek Casino & Hotel)
  • WynnBET (Kewadin Casino)

Additional approvals are expected in the near future.

FanDuel, DraftKings and BetMGM have been running ads for weeks leading up to the launch. Participants could sign up but could not place bets.

The legislature approved and Governor Gretchen Whitmer signed off on legalized internet gambling and sports betting in December 2019 but it took another year, impacted by Covid-19, for lawmakers to establish rules and regulations.

Richard Kalm, executive director of the Gaming Control Board, said, “Online gaming and sports betting will provide the casinos with new ways to engage with customers while the state and local communities will benefit from taxes and payments on wagering revenue. We want the public to have confidence when they place wagers, and our agency has required the providers to prove they meet Michigan’s standards, which are designed to protect the participants.”

In-person sports betting began in Michigan last March but casinos closed soon after due to the Covid-19 pandemic. Sportsbooks reopened in the summer and closed again November 18 but have remained open since December 22 at reduced occupancy.

Bettors must be at least 21 years of age and must be located within state borders to place bets online.

Greektown currently offers only online sports betting. Greektown owner Penn National Gaming launched its Barstool Sportsbook mobile app on January 22 and issued a statement that its online casino games “will follow shortly thereafter, subject to final regulatory approvals.” Greektown opened a retail sportsbook in December.

MGM Resortss President of the Midwest Group David Tsai said, “We are excited to bring BetMGM’s market-leading sports betting and iGaming app to Michigan. The online experience will be a complementary extension of MGM Grand Detroit’s best-in-Michigan BetMGM Sportsbook and lounge, giving sports fans and bettors different opportunities to get in on the action.”

MotorCity Casino Hotel President Bruce Dall noted the casino opened its on-site FanDuel Sportsbook in early 2020. He said MotorCity is “thrilled to build on this collaboration with a fully integrated, real money online gaming experience for residents and visitors to the state of Michigan.”

FanDuel Chief Marketing Officer Mike Raffensperger stated about 90 percent of the company’s users in markets where sports betting already is allowed use FanDuel through its mobile app. He added, “Frankly speaking, sports betting is a marketplace that existed prior to us launching legally. It just happened in the black market and the gray market with offshore accounts where maybe you’ll get your money out, maybe you won’t.”

Raffensperger said onsite casino sportsbooks don’t have to worry about online apps. “There’s nothing like the experience of a sports book, watching a great game on giant TVs and being there with your friends. Covid-19 has made that difficult but it’s a wonderful, fun experience.”

Bryan Newland, Indian community chairman at Bay Mills Resort & Casino in the Upper Peninsula, said, “We look forward to officially launching our partnership with DraftKings and bringing a new aspect of gaming entertainment to our fellow Michiganders. Online gaming and sports betting will help our tribe and our casino move solidly into the future.”

Revenue from online sports wagering through commercial and tribal apps will be taxed at 8.4 percent. For all other internet gambling, the tax rate will range from 20 percent to 28 percent, based on adjusted gross receipts.

Last year, retail sports betting at the Detroit casinos brought in just under $845,000 for the city and more than $690,000 for the state. Sports betting and internet gaming tax revenue will be allocated with 30 percent to the city, 5 percent or up to $3 million a year from each source to the Michigan Agriculture Equine Industry Development Fund and 65 percent to the state’s Internet Sports Betting Fund or Internet Gaming Fund.

Tribal casinos will pay 90 percent of sports betting revenue to the Internet Sports Betting Fund and 10 percent to the Michigan Strategic Fund. For online gambling revenue, they’ll pay 20 percent to local governments, 70 percent to the Internet Gaming Fund and 10 percent to the Michigan Strategic Fund.

The three commercial casino retail sportsbooks in Detroit took in $130.7 million in sports wagers since launching last March, with revenues of about $18.3 million. Covid-19 closures and cancellations of college and professional sports impacted results. In total, the Detroit casinos posted about $639 million in total revenue during 2020, a drop of 57 percent from a record $1.5 billion in 2019, according to MGCB data. They paid $73.8 million in wagering taxes and development agreement payments to the city in 2020, down from $184.2 million paid in 2019.

With online sports betting now a reality in Michigan, DraftKings Director of Race and Sportsbook Johnny Avello said, “I think we’re going to do pretty well in the state. Different states have different behaviors on how they bet. Michigan is a state with a good sports background. It’s going to be a competitive market, but we don’t run away from competition.”

In Virginia, the state Lottery approved a permit for FanDuel, which accepted its first wager on Thursday, January 21. FanDuel was given a head start by affiliating with the NFL Washington Football Team (formerly the Redskins) under a clause in the law that granted professional sports teams in the state “substantial and preferred consideration” in the licensing process. The team is based I Ashburn, Virginia, but plays its games in Landover, Maryland. The team is seeking a new stadium and the sports betting head start is expected to peek interest in a stadium in the Old Dominion.

Other companies, including BetMGM, Draft Kings, Barstool Sports and WynnBet, have applied for licenses as well and are expected to be approved in the coming weeks.

“We anticipate more than one sportsbook will be in position to begin accepting legal wagers from Virginians in time for the Super Bowl,” Virginia Lottery spokesman John Hagerty said.

FanDuel’s Raffensperger told the Associated Press that the opportunity was “humongous” and said his company will roll out a one-time risk-free promotion of the refund of a bet up to $1,000 if it loses.

The Virginia State Lottery has approved 10 independent standalone sports betting licenses in addition to five that will go along with casinos approved in the southern part of the state that should begin operating in 2022. The lottery said 25 operators have applied for the 10 licenses. They had until October 31 to apply and the lottery must approve or deny within 90 days.