After a year of anticipation, mobile sports betting is finally coming to Michigan. Local outlets report that Michiganders will be able to place wagers online in mid-January. DraftKings and FanDuel have sign-up offers for Michiganders who register accounts early. The Michigan Gaming Control Board approved fifteen online sportsbook operators. That’ll increase sports betting revenue and make sports betting more accessible. Here’s how online sports betting made it to Michigan – and why it took so long.
How Online Sports Betting Came To Michigan
Michigan sports betting is the result of one House representative: Brandt Iden. He spent four years and two governors to create a sports betting regulation scheme. Much of the challenge involved compromising between tribal casinos and Detroit’s three commercial casinos. But after getting bipartisan support and a governor willing to take the leap, Iden’s sports betting bills passed with Governor Whitmer’s signature in December 2019.
But like many sports betting bills, they were only the first step in bringing sports betting to Michigan. The Gaming Control Board had to write the rules governing Michigan’s new sports betting industry. It completed rulemaking in time for retail sports betting to go live in mid-March 2020. Less than a week later, the coronavirus lockdowns shut the casinos down. With no mobile sports betting rules in place, bettors had no mobile options. They would have to wait for the casinos to reopen and risk the pandemic to place sports wagers.
Needless to say, mobile sports betting is a welcome industry development for Michigan’s sports betting proponents.
The Financials Behind Mobile Sports Betting
2020 was a bad year to only have retail sports betting available. Michigan casinos had to weather multiple closures to control COVID-19 spread. Consequently, revenues were much lower than they would’ve been. From March to November 2020, Michigan’s commercial casinos processed $121 million in sports wagers. By comparison, Colorado processed almost twice that much in sports wagers: $231 million.
Colorado sports betting went live two months after Michigan and almost doubled Michigan’s handle in one month. That’s how powerful mobile sports betting is. Bettors wagered most of their money in online sportsbooks – especially during the pandemic. In Pennsylvania’s 2019/2020 fiscal year, 86.5% of wagers were made online. Here’s what Michigan’s sports betting figures could have looked like if its retail sports betting figures were only 13.5% of sports betting revenue:
| Actual Figures | Projected Figures | |
| Total Betting Handle | $121,043,104.42 | $896,615,588.30 |
| Gross Betting Revenue | $16,393,618.09 | $121,434,208.07 |
| Tax Revenue | $1,377,063.92 | $10,200,473.48 |
Online sports betting could have made quite the difference. That’s a potentially conservative estimate, too. Colorado bettors made 98% of their sports wagers online in November 2020. That would’ve added a massive amount of money to Michigan’s sports betting market:
| Actual Figures | Projected Figures | |
| Total Betting Handle | $121,043,104.42 | $6,052,155,221.00 |
| Gross Betting Revenue | $16,393,618.09 | $819,680,904.50 |
| Tax Revenue | $1,377,063.92 | $68,853,196.00 |
Those numbers are outlandish fantasies, but they prove an important point. If online sports betting eclipses retail sports betting like it has in other states, online sports betting could become a cash cow for Michigan. It probably won’t be to the tune of $6 billion in wagers. But it’ll provide revenue and consistency throughout the year.
Where Online Sports Betting Taxes Will Go
Michigan taxes sportsbook gross revenues at 8.4%. That 8.4% is split into two portions:
- 3.78% to the State of Michigan
- 4.62% to the City of Detroit
Tribal sportsbooks also pay an 8.4% tax on gross sports betting revenues, but they’re allocated differently than Detroit’s commercial casinos. Here’s how the tax dollars break down for commercial and tribal sportsbooks:
| Commercial Taxes | Tribal Taxes | |
| City of Detroit | 30% | 0% |
| Michigan Agriculture Equine Industry Development Fund | 5% | 0% |
| Internet Sports Betting Fund | 65% | 90% |
| Michigan Strategic Fund | 0% | 10% |
Commercial and tribal taxes are used quite differently. Both will see most of their taxes go into the Internet Sports Betting Fund. Money in the Internet Sports Betting Fund goes to:
- Michigan Gaming Control Board Funds
- The Compulsive Gaming Prevention Fund
- The First Responder Presumed Coverage Fund
- The State School Aid Fund
But that’s where the similarities end. Commercial taxes are further directed toward Detroit’s city budget and agriculture and equine development programs. (Those programs appear to be primarily racehorse breeding programs. Michigan’s horse tracks couldn’t be completely left out!)
Tribal taxes are clearer. What doesn’t go toward Detroit and jacked racehorses go to an economic development fund for job creation and economic growth. (The fund has a broad mandate, but it’s still clearer than the MAEIDF.)
Michigan Online Sports Betting
Sports betting is far from a moneymaker for Michigan without online sports betting. Retail sports betting was vulnerable to casino shutdowns. But online sportsbooks will be able to grow as the pandemic inches toward ending. Retail sports betting will likely get a boost from bettors who can leave their living rooms again. But after the post-pandemic retail bubble bursts, online sports betting will become the unambiguous champion of Michigan’s sports betting industry. If you need some last-minute pointers on sports betting, check out our sports betting guides. It’s never too late to learn how to use online sportsbooks.
Even if you wait until literally the last minute before online sports betting goes live in your state.
