Michigan Online Casinos Blowing Out Sports Betting In Creating Tax Revenue

Legal sports betting remains one of the consistent upward trends in the United States. The same can be said for online sports betting.

While dozens of states offer online sports betting in this country, only six offer some form of iGaming.

When Michigan legalized online sports betting, it also legalizing online casinos. Both launched services on Jan. 22, 2021.

What the last 15 months have shown, is that online casinos are producing far more state and local tax revenue than online sports betting.

Michigan online casino revenue sets record in April

The Michigan Gaming Control Board released April 2022 revenue numbers on Tuesday. It gave just a small insight as to how lopsided the tax revenue has been between online sports betting and online casinos.

Online sports betting in the state produced a handle of over $371 million, but the total revenue stopped just shy of $17 million.

With an 8.4% tax rate in Michigan, that revenue produced just over $944,000 for statewide taxes and just under $600,000 for city/local taxes.

When it comes to internet gaming, Michigan had a record month of $132.4 million in revenue.

For internet gaming, the state receives 70% of the total tax from the commercial operators and 80% of the total payment from tribal operators. The tax and payment rate ranges from 20-28% based on yearly adjusted gross receipts.

Just for April, Michigan generated $24.3 million in state taxes from internet gaming. It also generated $6.6 million in city/local taxes. Both of those were also record numbers for the state.

In state taxes, online casinos are amassing nearly 2,600% more money than online sports betting. In local taxes, it’s just over 1,100% more.

Michigan iGaming tax revenue well ahead of sports betting all-time

Since both online products launched in late January of 2021, the tax numbers are night and day.

Online sports betting has raised $10.8 million in state taxes and just under $6 million in local taxes.

Internet gaming has produced $290.6 million in state taxes all-time and $112 million in local taxes.

That’s a 2,700% difference in state taxes and nearly 1,900% difference in local taxes.

Consider that the all-time online sports betting state tax total isn’t even half of what internet gaming raised for just April 2022 alone.

A total of six different online casino operators (BetMGM, FanDuel, DraftKings, BetRivers, Golden Nugget, WynnBet/Caesars) have raised more in state taxes all-time than all 15 online sports betting operators combined.

BetMGM Michigan alone raised $8.8 million in state taxes for April 2022, which isn’t far from the all-time sports betting total.

Michigan in elite company

Currently, only six states in the country offer some form of iGaming. Nevada only offers online poker, but these four states offer online casinos alongside Michigan:

• Delaware
• New Jersey
• Pennsylvania
• West Virginia

Pennsylvania has been operating online since 2019 and online casinos have produced $424.4 million in tax revenue compared to $160 million in sports betting tax revenue. Keep in mind, retail sports betting began in 2018 for Pennsylvania.

In New Jersey, online casinos have generated $658 million in state tax revenue. Collectively, retail and online sports betting has generated $249.2 million in tax revenue.

It’s clear that getting online casinos and internet gaming legalized is a big boost for state and local tax revenue.

More states should be looking to follow in Michigan’s footsteps when it comes to getting both legalized, especially those working toward an online sports betting launch.