Online casino gambling and sports betting launched in late January in Michigan, generating nearly $90 million in tax revenue for the state through June. Analysts said that total could reach $200 million by the end of the year, significantly higher than initial estimates of $10 million to $50 million.
PlayMichigan analyst Matt Schoch said, “We knew it would be big. This is a state with a casino culture, but it’s been huge. And that’s just crushing the projections of even the more optimistic ones that people had going into it.”
Online casinos and sports books have taken in $483.1 million from late January through June. Online sports betting is taxed at 8.4 percent and online casino play is taxed from 20 percent to 28 percent.
Schoch noted, “Sports betting has been about what we expected, but online casino certainly has been a lot bigger than what people expected. I think the growth is going to be coming in the sports betting. I think that there’s a little bit of industry belief that maybe the online casino numbers have already plateaued a little bit.”
Schoch explained most of the tax revenue goes to education. “The horseracing industry gets a little bit of that tax money. There’s a prevention fund for firefighters who had been getting afflicted with a type of cancer,” he said. Another large amount goes to problem gambling services run by the state Department of Health and Human Services.
But now the traditional summer slowdown is taking effect. Michigan Gaming Control Board Executive Director Henry Williams said, “Summer is here, and Michigan is reopening after the pandemic restrictions so there are many entertainment opportunities. The slight tenth of a percent decline from May to June shows internet gaming and online sports betting continues to draw Michigan residents’ and visitors’ interest.”
Despite the lack of games among professional and college sports, operators in Michigan handled $253.1 million in online sports bets during of June. Combined with casino sportsbook wagers, the bets total reached $259.4 million, 0.7 percent higher than May. By comparison, operators handled $383.7 million in bets during March.
PlayMichigan analyst Jessica Welman stated, “Michigan’s sportsbooks grew so quickly from January through March that the slowdown that has followed might feel more dramatic than the reality. Sportsbooks remain in excellent position for a ramp-up when football season approaches. Until then, they will have to rely on opportunities such as the Olympics and the National Basketball Association finals to stoke interest.”
In June, gross revenue for online sports gambling rose 28.2 percent to $24.9 million, up from $19.5 million in May. Online sports betting also generated $16.8 million in taxable revenue in June, with a combined $1.4 million to state and local taxes. Schoch said, “We’ve been waiting for a bump in taxable revenue that led to a real increase in tax revenue, which we finally got in June. If there has been a disappointment with Michigan’s launch, it’s that tax revenue gains have lagged. So hopefully, this will continue into the fall, when we know revenue from sports betting will make a big leap forward.”
Revenue for online casinos and poker rooms fell to $89.2 million for June, a 4.9 percent decline from May. Online gaming generated $66.2 million in taxable income, producing $13.7 million in state taxes and $5 million in local taxes.
