Why Has the Mitten State Been So Successful with iGaming?
The state of Michigan has seen enormous success with online casinos and the legalization of sports wagering. It’s especially impressive given the snake-bitten start for the industry.
With House Bills 4311 & 4916 introduced in 2019, respective allowing for online casino play and sportsbooks, it took until March 2020 for the first retail sportsbook to open. In fact, Detroit Lions legend Barry Sanders placed the first legal wager on March 11, 2020.
That evening, most American sports shut down as the COVID-19 pandemic emerged throughout the nation.
But from that auspicious beginning, Michigan’s online casino and sportsbook industry has exploded into one of the nation’s most lucrative. Here’s a look at how they’ve done it.
Michigan Online Casinos
Michigan Emerges as a Top State for Gambling
The legalization of sports wagering triggered an explosion in the number of available casinos – both online and land-based – across the United States, but in reality, the industry has been thriving in Michigan for almost 40 years. The state’s history with legalized gambling may not be as publicized as those in Nevada or New Jersey, but some of the casinos in Michigan have paved the way for the success in other parts of the country.
In the late 1990s, a voting measure cleared the way for construction of three licensed casinos in downtown Detroit. By the fall of 1999, the MGM Grand Detroit and MotorCity Casino Hotel were open for business. Greektown Casino Hotel opened the following year.
The opening of these businesses greatly expanded gaming options in Michigan, but they weren’t the first available casinos in the state. Back in 1984, Kings Club Casino opened in Brimley, the first tribally owned casino in the United States.
Nine years later, the Saginaw Chippewa tribe entered into a deal with the state whereby they would hand over 2 percent of winnings from their own casino, the Soaring Eagle Casino and Resort in Mount Pleasant.
So when 2020 came around and the sports gambling side of things hit a rocky start with the pandemic, Michigan lawmakers and business operators didn’t sit around waiting for things to change. During the remainder of 2020, five more tribal casinos opened sportsbooks of their own, but the big break came at the start of 2021 when online casinos launched in Michigan.
Only four other states (Connecticut, New Jersey, Pennsylvania, and West Virginia) offer online casino play. But with a rich history of being pioneers in the industry, it wasn’t surprising to see Michigan join their ranks.
Online Casino Options in Michigan
When Governor Gretchen Whitmer signed the online casino law, operators of the state’s 26 land-based casinos (three commercial casinos in Detroit, 23 tribal casinos across the state) got a double dose of good news.
Not only would they soon have an additional source of revenue, but no new competition was permitted to enter the market. The law only allowed for existing Michigan casinos to apply for online casino licenses. What’s more, the law allowed them to do so at an affordable rate – $150,000 initial cost plus a $50,000 annual relicensing fee.
Now, less than three years after the law passed and about 18 months after online casino play became live, Michigan already has 15 online casino options for the state’s gaming enthusiasts:
- Barstool Casino
- BetMGM Casino
- BetRivers Casino
- DraftKings Casino
- Eagle Casino
- FanDuel Casino
- FireKeepers Casino
- Four Winds Casino
- Golden Nugget
- Play Gun Lake Casino
- PointsBet Casino
- Stars Casino
With a wealth of available options, competition for online casino players is furious. Therefore, Michigan gamers enjoy robust offerings with welcome bonuses, free plays, and deposit matches at each of these 15 online casinos!
Revenue from Michigan’s Online Casino Industry
Michigan’s impressive, extensive history in the casino business made the state a natural fit for a successful move into the online gambling world. But could anyone have foreseen the immediate impact?
Throughout 2021, while many people were staying home much of the time, the full gamut of online gambling options were available to people in Michigan. From sportsbooks to slot machines, if you wanted to play, you could do so in the Wolverine State.
Only a select few states can say that, and it shows in the revenue reports. By the end of 2021, the Michigan Gaming Control Board reported that the state generated an amazing $1.1 billion in digital gaming revenues during the year – making Michigan the third state to ever surpass the $1 billion mark in digital gaming in a single year, and the first state to do so in their first full year running the business.
Yes, there were reasons to believe Michigan would be successful. But even the experts didn’t expect this level of immediate payoff. And it’s only the beginning.
Buoyed by their billion-dollar performance in 2021, the state has seen revenue continue to climb during the first half of 2022.
September 2021 was Michigan’s first month reaching the $100 million mark in online gaming revenue, so let’s look at the numbers month-by-month since that time:
(Keep in mind, this tracks month-by-month revenue – not total handle, for which exact figures were not available. However, Michigan sportsbooks took in $3.7 billion in handle in 2021 – and they only comprise one part of the equation.)
Michigan’s Online Gaming Revenue By Month
So, through only four months of reporting, the state of Michigan has already surpassed the $500 million (half a billion dollars) mark for 2022, well on their way to a second consecutive year of well over $1 billion in revenue.
In 2021, this meant over $200 million in taxes to the state of Michigan, plus another $55 million in tax revenue for the city of Detroit. So how are they doing it?
The Michigan Online Casino Model: What Other States Can Learn
Hopefully, states around the nation are certainly starting to take notice of these billion-dollar business models in New Jersey, Pennsylvania, and now Michigan.
Quite simply, Michigan natives (and New Jersey and Pennsylvania) have unlimited access to gaming options. They can place wagers at the casino. They can play a few hands of blackjack or online poker from the comfort of their living rooms. They can wager on the game from home, at the stadium/arena, or while at the bar watching with friends.
The majority of states have legalized sports wagering now, but online casino play is still restricted to the handful of states mentioned earlier. Yet the three states seeing the greatest success are in that group.
Many lawmakers express concerns over any sort of online gambling, insisting it will lead to what they call “problem behavior.” But at this point, it’s not a question of “if” people will wager, but “where they will wager.
Soon, the abundant tax revenues enjoyed in Michigan and other states will become too enticing for these states to continue to pass up. It’s likely we’ll see Michigan’s model of widespread legalization followed by immediate, impressive revenues in many more states over the next decade or so.
Michigan Sports Betting Update
As discouraging as the start to sports wagering in Michigan could have been, the state’s recovery has again impressed industry experts across the nation.
During the shutdown of U.S. sports that occurred through much of the spring and summer of 2020, five tribal-based casinos opened sportsbooks of their own nonetheless. Although those casinos remained closed or opened at very limited capacities for the remainder of 2020, the start of 2021 brought a turning point in the industry for Michigan.
The start of online gaming on January 22, 2021, also marked the start of online sports wagering. By year’s end, Michigan enjoyed a $50 million-plus month in sports wagering revenue (November 2021) and will cross the $500 million dollar mark for sports wagering revenue alone sometime in June.
In comparison to other states, despite only being largely available for about 18 months, Michigan ranks in the top 10 of states generating revenue from online sports wagering since the overturning of the Professional and Amateur Sports Protection Act (PASPA) in 2018 that paved the way for legalized sports gambling in the United States. Here’s a list of the top states in generating revenue from sports wagering since May 2018:
(Figures as of May 31, 2022):
|STATE||REVENUE FROM SPORTS WAGERING||WHEN SPORTS WAGERING BECAME LEGAL|
|New Jersey||$1.81 billion||June 2018|
|Nevada||$1.37 billion||1972 (but revenue figures are since May 2018)|
|Pennsylvania||$1.06 billion||November 2018|
|New York||$465MM||July 2019|
Michigan Online Casinos
Despite being relatively new to the game, it hasn’t taken much time for Michigan to break into this top group of states for revenue generation. With online sports gambling now legal in New York, the Empire State figures to move to the top of the list within a few years, but Illinois, Iowa, and Michigan are creating a stronghold in the Midwest that will make it easy for other populous states, such as Ohio, to follow their examples.
Obviously, the sports wagering market is robust, as it generated $292MM in 2021 alone for Michigan. But that was only a fraction of the whopping $1.11 billion iGaming industry as a whole. The only states surpassing Michigan, again, are New Jersey and Pennsylvania. What do they all have in common? Robust legalized gambling in the form of sportsbooks, land-based, and online casinos.
While the rich histories of the gambling industries in states like New Jersey, Michigan, and Nevada play a role, it’s just a matter of time until other states decide to follow in those footsteps and create some history – and impressive revenue – of their own.