Michigan Online Sports Betting Totals $115 Million in First 10 Days

Michigan online betting totalled $115 million in the first 10 days according to reports released for January

Michigan online betting totalled $115 million in the first 10 days according to reports released for January

Michigan online gambling revenues for the first 10 days since the state allowed legal sports and casino betting have been released and it looks like the state is going to be one of the biggest in America.

The total handle (amount in $s of bets placed) from online sports gambling in Michigan for the period from legalization on January 22nd 2021 to the end of the month was $115.2 million, according to official reports released this week.

Michiganders had been excitedly waiting to be allowed to legally gamble within state lines and there was clearly a rush ahead of the Super Bowl, with the total handle for the state’s bets totalling $150 million. Of that total, $35 million was from retail locations with $115 million coming from online operators.

Of these, it was DraftKings, FanDuel, BetMGM and Barstool Sportsbook who accounted for the lion’s share, with those 4 operators making up over $110 million of the $115 million in wagers. The total gross revenue for online sportsbook operators was $13.3 million.

However, a large chunk of this was bonus payments made to new players and the actual adjusted revenue once bonus and promotion payments of $18.5 million were deducted was a negative yield of $5.2 million.

This is not something that will trouble any of the big players, who would expect to make losses due to the costs of acquiring new customers in a new launch state. The average hold of 11.6% across all online sportsbooks would indicate that the projected long term revenues from sports betting in Michigan will be substantial.

Michigan is one of only four states which allows legal online casino gambling, or iGaming, and the gross revenues from players in the 10 day period for iGaming totalled $29.4 million, according to the official reports.

Michigan Online Sportsbook Revenues

Michigan Online Betting Revenues Explained

Michigan launched on January 22nd with 11 online sportsbooks and casinos. The ‘Big Four’, according to the official figures, are DraftKings, FanDuel, BetMGM and Barstool. They accounted for a massive 96.4% of the legal sports betting handle in the Great Lake State and 93.2% of the revenues.

Barstool Sportsbook reportedly saw 48,400 registrations in the first 10 days of operations in Michigan with 26,200 players making a cash deposit.

Those bettors wagered $27.5 million and the sportsbook’s hold was 12.1%. Adjusted for bonusing this became 6.2% for a profit of $1.7 million for Barstool Sportsbook.

It must be noted, however, that Barstool had arguably the largest media presence of any online sportsbook over the launch weekend, with Dave Portnoy and his team flying to Michigan and spending the weekend in the Greektown Casino. Portnoy himself was placing exceptionally large wagers, which will have contributed to the overall handle and the sportsbook ran a promotion where all deposits were matched with donations to the Barstool Fund, which provides COVID relief for small businesses. The donations figure is not included in the reported revenues as it will be classed as a marketing spend.

DraftKings, FanDuel and BetMGM all made losses in the first 10 days of operations due to aggressive bonusing with pre-launch Michigan Free Bet Offers matched with enhanced odds and special cash bonuses paid to ‘early adopters’ in the state.

Michigan Online Casino Revenues Encouraging

There is less information available about Michigan online casino revenue breakdown, although a total of $29.4 million is a very encouraging start for the industry. Penn National’s earnings presentation reported that 15% of players on the Barstool app made a casino wager in the first 3 days of operation and it would be safe to assume that there was similar crossover across DraftKings, FanDuel and BetMGM, all of whom have integrated sportsbook and casino wallets for their customers.

There is clearly an appetite for online casino gambling in Michigan and MGM in particular should benefit due to their customer database from the MGM Detroit, while Golden Nugget would also expect to gain some ground over the coming months due to the strength of their casino app, which is rated as the best in New Jersey.

Benefits of Online Casino Gambling to Michigan

The new revenues provided from online gambling in Michigan will be of clear benefit to the state with $4.4 million in taxes coming in from the first 10 days of iGaming operations. This is in contrast to $110,000 from sports betting (reduced due to the negative hold from the sportsbooks).

Speaking after the publication of the figures, Michigan Gaming Control Board Executive Director Richard Kaln highlighted the benefits to the community.

“Internet gaming operators are off to a good start in Michigan,” he said in a statement.

“The taxes and payments from online gaming will provide funding for K-12 students, the city of Detroit and Michigan tribal communities.”

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