Michigan Sports Betting’s First Year: What Was And What Could Have Been

The events of March 11 and 12 left an indelible mark on our nation’s memory. As news of the pandemic unfolded, we gradually came to accept the imminent arrival of a new normal. Amidst this global upheaval, Michigan’s sports betting industry was just beginning to flourish, seemingly unaffected by the surrounding shutdown.

In March, just before the sports world came to a halt, Detroit’s casinos made history by accepting their inaugural legal sports bets.

Despite the growth and occasional rallies in sports betting, the pandemic’s missed opportunities and the frequent interruptions in 2020 have made it difficult to determine the true potential size of the industry.

“The pandemic has been persisting for quite a while,” expressed Jake Miklojcik, gaming analyst for Michigan Consultants.

The situation regarding casino revenues is undeniably disheartening. The challenge lies in the difficulty of distinguishing and evaluating the various numbers due to the impact of COVID and the closures. It is simply a very challenging task.

There is potential for a silver lining in the first year of sports betting in Michigan, although it has been a mixed experience. The upcoming launch of mobile sports betting in January is expected to provide a much-needed boost.

More than $120 million bet on sports in 2020

Greektown Casino, MGM Grand Detroit, and MotorCity Casino experienced a period of closed doors spanning almost five months, starting from March and lasting until August.

After that, the industry faced an additional month of closed casinos just as sports betting gained momentum in November.

In December 2019, Governor Gretchen Whitmer approved enhanced gambling regulations, which opened up the opportunity for the Michigan Gaming Control Board to expedite the process of introducing sports betting just in time for the March NCAA Tournament, an extraordinary event showcasing college basketball.

In 2020, Detroit’s casinos have been operational for less than four months after the legalization of sports wagering. Similarly, tribal casinos across the state have also introduced sportsbooks, but a significant number of them have remained closed throughout the year. Additionally, when these tribal casinos are open, they are not required to publicly report their numbers to the MGCB.

$121 million was wagered on sports in 2020 as downtown Detroit entered the final week of betting for the year.

Out of the total, over $1.3 million was revenue collected in taxes by both the state of Michigan and the city of Detroit.

Casino	Handle	Revenue	State tax (3.78%)	City of Detroit tax (4.62%)
Total	$166,447,691.29.	$22,339,974.96	$844,451.05	$1,032,106.84
MGM Grand Detroit	$68,722,968.50	$9,029,186.40	$341,303.25	$417,148.42
MotorCity Casino	$61,496,308.00	$7,596,247.30	$287,138.15	$350,946.62
Greektown Casino-Hotel	$36,228,414.79	$5,714,541.26	$216,009.66	$264,011.81

Pandemic makes projections hard to calculate

It is difficult to comprehend the significance of that figure in relation to initial expectations. Firstly, the closure of Michigan sports betting just five days after its launch for a period of almost five months was completely unexpected. Secondly, the absence of any sports events to place bets on further complicated the situation.

Last year, when Whitmer signed the gambling bills, the governor’s office proudly highlighted the addition of $19 million in fresh revenue for Michigan.

Despite generating over $1 million in revenue from fantasy sports contests, the first year, including the initial months of 2021, will still fall significantly below expectations.

It is crucial to note that the projections encompassed the online market as well, which is anticipated to surpass retail sports betting by a significant margin. Based on the experiences of other markets like New Jersey and Pennsylvania, it is anticipated that approximately 80% of all bets in Michigan will be placed online.

Although 2020 has been a chaotic year, it is challenging to find any positive outcomes from the numbers. However, a faint glimmer of success can be observed.

The silver lining of Michigan sports betting

Despite being closed for the first week, Detroit casinos managed to accumulate over $15.7 million in bets in August.

In September and October, the upward trend persisted as sports bets worth over $33.5 million and $46.1 million were handled during those respective months.

November was on track until it came to an abrupt end on November 17, with a total betting amount of almost $25.1 million.

The numbers become even more impressive as casinos had to adhere to a 15% capacity limitation, excluding the initial five days, during the period in which sports betting was active in the state.

According to Miklojcik, individuals may have chosen to stay at home due to the presence of COVID-19, but not necessarily due to the imposed restrictions.

Miklojcik expressed that one is never truly operating at 100%. “On most days, you will still be able to meet your previous expectations,” he stated.

With the inclusion of a strong online gambling market, the figures mentioned by Whitmer and Lansing can certainly be achieved in the coming years.

Michigan ‘pretty excited’ about legal betting

It is difficult to determine the exact impact of sports betting on tribal casinos due to the lack of publicly available data. Therefore, the total figures for Michigan sports betting may be higher than initially perceived, considering the involvement of tribal gaming.

In June, FireKeepers Casino located in Battle Creek inaugurated its sportsbook. As a result, 16 out of the 23 tribal casinos in Michigan have now established on-site sportsbooks.

For various reasons, the current data on numbers in Michigan is purely anecdotal at this time, with one of the contributing factors being the independent operation of tribes from the state. Nevertheless, the public reporting of online sports betting through tribal casinos is expected. Ultimately, according to Miklojcik, it is highly probable that the tribes welcomed the inclusion of sportsbooks.

In my opinion, they seemed to be generally satisfied, although I believe no one had a complete understanding of what to anticipate. It appeared to gain popularity gradually, but we must acknowledge that there was a significant shortage of events to wager on initially. However, once sports resumed, I believe people were quite enthusiastic.

Although 2020 may not have been the most ideal year to commence a new legal gambling sector, the onset of online betting in 2021 will usher in a completely transformed world.