Michigan’s First Year of Legal Online Gambling Ranks Among Nation’s Best
What a difference a year can make.
The gambling landscape changed a great deal in 2021 for the state of Michigan.
With the launch of legal online sports betting and online casinos on Jan. 22, 2021, it sparked months of record-breaking numbers in the in-state industry.
For 2021, Michigan found itself sixth in online sports betting handle nationwide. It also finished third in Internet gaming revenue.
When breaking down all of the numbers of 2021, how does Michigan compare to the rest of the country?
Breaking down Michigan’s first year
Though Michigan had only 10 days of legal online gambling in January 2021, the numbers for all of 2021 are still quite impressive.
When it comes to online sports betting, here are the final tallies for the year.
- Total Online Handle: $3,655,278,366
- Total Online Revenue: $292,172,413
- Total Taxable Revenue: $110,588,847
- State Taxes Generated: $7,269,225
- City Taxes Generated: $4,067,107
For internet gaming, which combines online casinos and online poker, the numbers break down like this:
- Total Online Revenue: $1,113,999,385
- Total Taxable Revenue: $1,003,453,761
- State Taxes Generated: $201,667,034
- City Taxes Generated: $55,279,415
- Tribal Operator Governing Body Payments: $22,393,662
Where Michigan stacks up nationwide
Michigan’s first year of online sports betting led it to finish sixth nationwide in online handle. In revenue, Michigan landed fourth.
Here’s a look at each state that generated at least $1 million in online handle for 2021:
| State | Handle | Revenue | State Tax |
|---|---|---|---|
| New Jersey | $9,949143,033 | $740,274,313 | $114,657,715 |
| Illinois | $6,725,719,153 | $506,000,954 | $80,519,543 |
| Pennsylvania | $6,022,177,533 | $450,521,446 | $102,691,783 |
| Nevada | $5,254,050,503 | $194,286,000 | $13,114,306 |
| Colorado | $3,785,680,256 | $249,020,325 | $11,381,663 |
| Michigan | $3,655,278,366 | $292,172,413 | $11,336,333 |
| Indiana | $3,420,239,821 | $258,227,753 | $24,531,636 |
| Virginia | $3,221,790,714 | $285,227,753 | $24,531,636 |
| Tennessee | $2,730,459,000 | $239,872,000 | $39,300,000 |
| Iowa | $1,797,996,171 | $87,747,929 | N/A |
| Arizona | $1,226,682,920 | $119,449,364 | $4,098,055 |
While Michigan’s numbers look solid, you’ll notice their total statewide taxes (city included) are among the lowest. Michigan led the way in reported promos at over $180 million. That left the state’s taxable revenue at just over $110 million.
When it comes to iGaming, it gets a little easier to breakdown. Only five states had legalized online casinos at the end of 2021.
| State | IGaming Revenue | State Taxes |
|---|---|---|
| New Jersey | $1,366,929,642 | $239,212,685 |
| Pennsylvania | $1,292,533,787 | $466,384,411 |
| Michigan | $1,113,999,385 | $279,340,111 |
| West Virginia | $57,866,221 | $9,247,106 |
| Connecticut (3 months) | $47,589,481 | $6,629,622 |
| Delaware | $10.6 million | N/A |
The numbers for online casinos were quite competitive between New Jersey, Pennsylvania and Michigan. The Mitten came in a close third, but generated the second-most statewide taxes.
What Michigan did right
A total of five states waved the green flag on online sports betting in 2021 (Arizona, Connecticut, Michigan, Virginia, Wyoming). Of the five, Michigan definitely led the way in both online handle and revenue.
Other states could learn from Michigan in terms of a successful launch of online sports betting. On Jan. 22, 10 different sportsbooks (as well as eight online casinos) were part of the initial launch. That was just prior to the NFL conference championship games with a lot of sign-up promos offered to the crop of new users in the state.
Currently, 14 online sportsbooks are active in the state.
By comparison, both Pennsylvania and New Jersey had just three online sportsbook apps available during their respective launches.
New Jersey only generated $157.4 million in online revenue over its first year. While NJ dominated the 2021 online handle and revenue race, it now has New York to deal with. New York joined the online sports betting game Jan. 17 of this year.
Pennsylvania generated $1.837 billion in online handle over its first year with just over $77 million in online revenue.
While Pennsylvania ran into the pandemic for its final three months of its opening year, its top online handle for a month during the first year was $308.6 million. That’s quite a difference to Michigan’s top month of $484.6 million last December.
What’s ahead in year two of online sports betting
The field keeps growing nationwide when it comes to online sportsbooks. Right now, a total of 19 different states are legalized.
Two just started last month (New York, Louisiana), while Ohio and Maryland are in efforts to join the club. Our friends to the north in Ontario have already set an April 4 launch date.
Michigan could see a 15th online sportsbook added as Soaring Eagle Casino approaches launch of their app.
One area where the state would probably like to play catch up to others, is in tax revenue; specifically in regard to online sports betting.
Last year’s $180 million in promos definitely hampered the total tax number. With the state entering its second year of activity, can we expect the same level of promo numbers?
Everyone in Michigan was eligible for new-user bonuses and deposit matches last year. That obviously looks much different in Year 2.
However, Pennsylvania still reported more than $165 million in promos for 2021, which was in the midst of its third year of operation.
Interstate compacting could be 2022’s newest gift
When it comes to iGaming, Michigan is still approaching a big landmark that could see even more money generated across the state.
If Michigan is allowed into the Multi-State Internet Gaming Agreement, it could begin interstate compacting. That would allow Michiganders to play online poker against players in states that are part of the agreement.
That, combined with a planned launch of World Series of Poker, would be a big addition to the state’s online gambling menu.
While the original projections expected a 2021 start for WSOP and Michigan in the MSIGA, it is still a waiting game in early 2022. The Michigan Gaming Control Board’s latest update on the matter was that their request to join the multi-state agreement is under review by the current states.
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