Detroit Mayor Mike Duggan Credits Online Gaming For Helping Offset City’s Losses

Detroit Mayor Mike Duggan commended Michigan’s online gaming industry this week, showering it with high praise.

Duggan informed City Council members on Monday that the surge in online gaming taxes effectively compensated for the losses Detroit incurred due to the COVID-19 pandemic, as reported by the Detroit Free Press.

In his proposed budget for the 2024 fiscal year, starting in July, Duggan anticipated that online sports betting and online casinos would contribute to his vision of a “return to normal.”

Online gaming projected to bring in nearly 3x more in 2024 fiscal year

During his presentation on the upcoming fiscal year’s budget, Duggan addressed the influence of iGaming on Detroit.

Duggan stated that in December 2019, the casinos approached Lansing and requested legislation to permit internet gaming. He mentioned that a deal was successfully negotiated, thanks to the backing of Detroit’s delegation, ensuring the city’s inclusion in the revenue generated from internet gaming. Duggan further explained that this new source of income has been able to compensate for the losses in our income tax revenue thus far.

In the 2021 fiscal year, the city of Detroit generated $26.6 million from iGaming, contributing to the General Fund Revenue. Despite initially projecting $1.084 billion in revenue, the city fell short and recorded a total of $1.015 billion.

The projected revenue for iGaming in the fiscal year 2024 is $71.1 million, which will exceed the planned General Fund Revenue of $1.095 billion for Detroit. Consequently, the new projections estimate the city’s revenue to be over $1.1 billion.

Councilman Fred Durhal III, the driving force behind the initiative to legalize online gaming revenue in Detroit, believes that the decision has proven to be worthwhile.

Durhal informed the Free Press that “We possess the capability to acquire those funds. In the event of a pandemic-induced closure, people are unable to spend money, resulting in a decrease in revenue generation. However, with the option to capture online revenue, we have established a stabilizing element or a safety net that prevents the loss of crucial revenue needed for city services.”

Future iGaming projections for Detroit

Detroit is planning to increase its estimates for iGaming tax earnings in the coming fiscal years.

The projection for 2024 is expected to be $74.6 million, while for 2024 it is projected to reach $75.2 million.

During the 2021 fiscal year, the Recurring Wagering Tax saw a decline for the second consecutive year, with a combined total of $136.8 million. This amount included $26.6 million from iGaming and $110.2 million from onsite gaming.

The projected growth for the 2024 fiscal year is expected to reach $248.8 million, with $71.1 million coming from iGaming and $177.7 million from onsite activities.

The future forecasts for subsequent fiscal years and the Recurring Wagering Tax are as follows:

• In the fiscal year of 2024, the total revenue amounted to $265.5 million, with $74.6 million generated from iGaming activities and $190.9 million from onsite operations.
• In the fiscal year 2024, the total revenue is projected to reach $268.0 million, with $75.2 million generated from iGaming and $192.8 million from onsite activities.
• In the fiscal year 2025, the total revenue is projected to be $270.8 million, with $76.1 million generated from iGaming activities and $194.7 million from onsite operations.
• In fiscal year 2026, the total revenue amounted to $273.6 million, with $76.9 million generated from iGaming and $196.7 million from onsite activities.

Record year for gambling in 2021

In terms of sports betting handle, sports betting revenue, and internet gaming revenue, Michigan achieved remarkable figures throughout the entire calendar year of 2021.

Online betting in the mitten state accumulated a hefty sum of $3.7 billion in wagers for the year 2021, resulting in a noteworthy revenue of $292.2 million. Notably, internet gaming alone contributed a substantial revenue of $1.1 billion.

Online sports betting and online casinos contributed a substantial amount of approximately $209 million in state taxes, while city taxes fell just short of $60 million.

The momentum continues into 2024 as there is no sign of things slowing down. In January, the sports betting handle reached an all-time high of $496.8 million, resulting in $34.7 million in casino revenue and $1.4 million in state taxes.