PlayMichigan.com: Sports betting drops for first time in online era

Michigan experienced its first month-over-month decline in sports betting since launching online sports betting earlier this year, an unsurprising result as the sports calendar slowed in April. But the seasonal slowdown didn’t stop the state from becoming the quickest in the U.S. to $1 billion in online wagering. This as online casinos continued to dwarf sports betting with another month of revenue that neared $100 million, according to PlayMichigan, which analyzes and researches the state’s regulated online gaming and sports betting market.

“Sports betting gets the lion’s share of attention, but it will take years for Michigan’s sportsbooks to reach the kind of revenue that online casinos are already producing,” said Jessica Welman, analyst for PlayMichigan.com. “In addition, online casinos aren’t susceptible to the same seasonal ebbs and flows like sports betting. That said, $1 billion in less than four months of online sports betting is no minor feat either.”

Relying mostly on regular season baseball and NBA games to generate action, Michigan sportsbooks accepted $249.9 million in online handle in April, according to official data released Friday by the Michigan Gaming Control Board. That total was down 30.5% from $359.5 million in March. Combined with the state’s $24.2 million retail handle, which was released last week, Michigan’s online and retail sportsbooks collected $274.2 million in bets, 91.1% of which were made online. The combined handle was down 28.5% from $383.7 million in bets in March.

The total handle will likely keep Michigan at No. 5 in the U.S., behind New Jersey, Nevada, Pennsylvania, and Illinois. But with $1.03 billion in online wagers made from the launch of online sports betting on Jan. 21 through April 30, Michigan is the quickest of any state to reach $1 billion in online wagers.

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April’s gross operator revenue from online betting slipped to $20.4 million, down 36.8% from $32.3 million in March. Adjusted gross revenue fell to $10.9 million from the record $19.0 million generated in March. That revenue yielded just $312,824 in state taxes. Promotional credits continue to sap the state’s take, even as the promotional spend fell to $9.5 million in April.

“Sportsbooks are in a generally healthy position heading into the typical summer slowdown, especially considering Michigan’s pro teams have not done much to spur interest,” said Matt Schoch, analyst for PlayMichigan.com. “Tax revenue is still a concern, and we will likely have to wait until football season to see significant growth in sports betting again. But with the Olympics this year and the NBA Finals later than usual, sportsbooks can look forward to a busier-than-normal summer. Ideally, that will positively affect tax revenue, too.”

FanDuel/MotorCity Casino topped online operators with a $74.2 million online handle, down from $107.2 million in March. April’s action produced $7.0 million in gross sports betting receipts for FanDuel, down from $7.8 million in March, resulting in a market-best $5.2 million in taxable revenue, up from $5.0 million.

DraftKings/Bay Mills Indian Community jumped to No. 2 with $61.5 million in wagers, down from $76.5 million in March. Gross gaming revenue dropped to $3.4 million from $6 million in March, leading to $1 million in adjusted revenue, down from $3.7 million. BetMGM/MGM Grand Detroit was third in betting volume with $54.9 million, down from $92.6 million in March. Gross receipts fell to $5.5 million from $8.7 million, and taxable revenue dropped to $3.8 million from $6.4 million.

The online market leaders were followed by:

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Barstool/Greektown Casino ($24.8 million handle, down from $39.6 million in March; $1.2 million adjusted gross revenue, down from $3.6 million)
PointsBet/Lac Vieux Desert Band of Lake Superior Chippewa Indians ($14.1 million handle, down from $14.2 million; -$355,073 AGR, down from $2.2 million)
William Hill/Grand Traverse Bay Band of Ottawa and Chippewa Indians ($7 million handle, down from $11 million; -$8,162 AGR, down from $1 million)
FOX Bet/Little Traverse Bay Bands of Odawa Indians ($5.5 million handle, down from $7 million; $163,175 AGR, down from $503,063)
BetRivers/Little River Band of the Ottawa Indians ($2.8 million handle, down from $4.8 million; -$28,856 AGR, down from $537,644)
Twin Spires/Hannahville Indian Community ($1.9 million handle, down from $3.2 million; -$12,190 AGR, down from $209,572)
Wynn/Sault Ste. Marie Tribe of Chippewa Indians ($1.9 million handle, down from $2.2 million; $89,902 AGR, down from $418,529)
Golden Nugget/Keweenaw Bay Indian Community ($874,114 handle, up from $789,792; -$43,215 AGR, down from $70,649)
Four Winds Sportsbook/Pokagon Band of Potawatomi Indians ($345,719 handle, down from $385,009; $107,524 AGR, up from $51,196)
“FanDuel, BetMGM and DraftKings continue to flex their marketing advantages to separate themselves from the state’s other operators,” Schoch said. “As the trio entrench themselves at the top of the market, it will be increasingly difficult for any other operator to break through.”

Online casinos and poker

Michigan’s online casinos and poker rooms continued to impress with $94.9 million in April — down slightly from $95.1 million in March. That total actually represents a small increase in revenue per day, however. Online casinos and poker rooms combined to win $3.16 million per day for the 30 days of April, up from $3.07 million per day in the 31 days of March.

The win yielded adjusted gross receipts of $88.9 million, up from $88.7 million in March, generating $17.8 million in tax revenue for the state and $5.2 million in local taxes.

April’s revenue should keep Michigan close to Pennsylvania and New Jersey, the nation’s two largest iGaming markets in the U.S., though neither of those states has reported April data yet. The biggest difference is where the states are in maturity. New Jersey launched online casinos in 2013 and Pennsylvania launched in 2019.

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“There is no precedent for how Michigan has responded to the launch of online casinos,” Welman said. “It’s safe to say that at some point Michigan will challenge to be the largest online casino market in the U.S. The only question is when.”

Other highlights from April:

BetMGM/MGM Grand Detroit led with $36.8 million in adjusted receipts, yielding $7.2 million in state taxes.
FanDuel/Motor City was second with $14.1 million in AGR, producing $2.8 million in state tax. That total edged DraftKings/Bay Mills’ $14 million in AGR.
For more information and analysis on regulated sports betting in Michigan, visit PlayMichigan.com/news.

About the PlayUSA.com Network:
The PlayUSA.com Network is a leading source for news, analysis, and research related to the market for regulated online gaming in the United States. With a presence in over a dozen states, PlayUSA.com and its state-focused branches (including PlayMichigan.com, PlayNJ.com, and PlayPennsylvania.com) produce daily original reporting, publish in-depth research, and offer player advocacy tools related to the advancement of safe, licensed, and legal online gaming options for consumers. Based in Las Vegas, the PlayUSA Network is independently owned and operated, with no affiliations to any casino.