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

Michigan’s online gaming industry was given big praise this week by Detroit Mayor Mike Duggan.

According to the Detroit Free Press, Duggan told City Council members on Monday that the increase in online gaming taxes helped offset the city’s losses from the COVID-19 pandemic.

Duggan also projected that online sports betting and online casinos will help in his proposed “return to normal” budget for the 2023 fiscal year, which begins in July.

Online gaming projected to bring in nearly 3x more in 2022 fiscal year

While giving his proposed budget for the next fiscal year, Duggan discussed iGaming’s impact on Detroit.

“In December 2019, the casinos went to Lansing and asked for legislation to allow internet gaming,” Duggan said. “We struck a deal, with the support of our Detroit delegation, that the city got a share of the Internet gaming…that Internet gaming revenue, which was new to us, has so far offset the losses of our income tax revenue.”

During the 2021 fiscal year, iGaming accounted for $26.6 million of the General Fund Revenue for the city. That year, Detroit projected $1.084 billion in revenue, but ended up with just $1.015 billion.

In the 2022 fiscal year, iGaming is projected to bring in $71.1 million in revenue. That will push Detroit past a planned General Fund Revenue of $1.095 billion, with projections now over $1.1 billion.

Councilman Fred Durhal III who was behind the push to allow for online gaming revenue for Detroit, feels that decision is paying off now.

“We have the ability to capture those dollars,” Durhal told the Free Press. “During a pandemic, if they close, obviously people are not able to spend money and we are generating less revenue. But the ability to capture online created a stabilization or a safety net for us so we are not losing vital revenue for city services.”

Future iGaming projections for Detroit

Detroit is expanding its projections for iGaming tax revenue in future fiscal years as well.

In 2023, it is projecting $74.6 million. For 2024, it is projecting $75.2 million.

When it comes to Recurring Wagering Tax, iGaming’s $26.6 million was combined with $110.2 million from onsite gaming during the 2021 fiscal year. That total of $136.8 million was the second consecutive year the amount had declined.

In the 2022 fiscal year, that number is projected to grow to $248.8 million ($71.1 million iGaming, $177.7 onsite).

Future projections for other fiscal years and Recurring Wagering Tax are:

• FY 2023: $265.5 million ($74.6 iGaming, $190.9 onsite)
• FY 2024: $268.0 million ($75.2 iGaming, $192.8 onsite)
• FY 2025: $270.8 million ($76.1 iGaming, $194.7 onsite)
• FY 2026: $273.6 million ($76.9 iGaming, $196.7 onsite)

Record year for gambling in 2021

For the 2021 calendar year, Michigan did record numbers in regard to sports betting handle, sports betting revenue, and internet gaming revenue.

A total of $3.7 billion was wagered online in the mitten for 2021, leading to $292.2 million in revenue. Internet gaming brought in $1.1 billion in revenue.

That led to nearly $209 million in state taxes from online sports betting and online casinos. City taxes were just shy of $60 million.

Things aren’t slowing down to start 2022 either. January marked another record month in sports betting handle at $496.8 million, which generated another $34.7 million in casino revenue and $1.4 million in state taxes.