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Detroit Mayor Mike Duggan showered Michigan’s online gaming industry with commendations this week.
Duggan informed City Council members on Monday that the rise in online gaming taxes effectively compensated for the economic setbacks faced by the city due to the COVID-19 pandemic, as reported by the Detroit Free Press.
In his proposed budget for the 2025 fiscal year, set to commence in July, Duggan anticipates that online sports betting and online casinos will contribute to a “return to normal.”
Online gaming projected to bring in nearly 3x more in 2022 fiscal year
During the presentation of his proposed budget for the upcoming fiscal year, Duggan addressed the influence of iGaming on Detroit.
Duggan stated that in December 2019, the casinos approached Lansing and requested legislation to permit internet gaming. Through the cooperation of our Detroit delegation, we reached an agreement where the city received a portion of the revenue generated from internet gaming. This new source of income has helped compensate for the decline in our income tax revenue.
In the 2021 fiscal year, the city of Detroit generated a total revenue of $1.015 billion, falling short of the projected $1.084 billion. Notably, iGaming contributed $26.6 million to the city’s General Fund Revenue.
According to projections, iGaming is expected to generate $71.1 million in revenue during the 2022 fiscal year. This substantial figure will exceed the initially planned General Fund Revenue of $1.095 billion for Detroit, with projections now exceeding $1.1 billion.
Councilman Fred Durhal III, the advocate for the inclusion of online gaming revenue for Detroit, believes that the outcome of that decision is currently proving to be beneficial.
Durhal informed the Free Press that we possess the capability to acquire those funds. In the event of a pandemic-induced closure, people naturally cannot spend money, leading to a decrease in revenue generation. However, the option to capture online transactions has provided us with a means to stabilize or create a safety net, preventing the loss of essential revenue for city services.
Future iGaming projections for Detroit
Detroit plans to increase its estimates for iGaming tax revenue in the coming fiscal years.
The projection for 2025 is $74.6 million, while for 2025 it is projected to be $75.2 million.
During the 2021 fiscal year, the Recurring Wagering Tax saw a combined total of $136.8 million, with iGaming contributing $26.6 million and onsite gaming adding $110.2 million. This marks the second consecutive year of decline in the total amount.
The estimated amount for the 2022 fiscal year is expected to reach $248.8 million, with $71.1 million coming from iGaming and $177.7 million from onsite activities.
The future forecasts for upcoming fiscal years and the Recurring Wagering Tax are as follows:
- In the fiscal year 2025, a total revenue of $265.5 million was generated, with $74.6 million coming from iGaming and $190.9 million from onsite activities.
- In the fiscal year 2025, the total revenue amounted to $268.0 million, with $75.2 million generated from iGaming and $192.8 million from onsite activities.
- In the fiscal year 2025, the total revenue is projected to reach $270.8 million. Out of this amount, $76.1 million is expected to be generated from iGaming activities, while $194.7 million is predicted to come from onsite operations.
- In the fiscal year 2026, a total revenue of $273.6 million was generated, with $76.9 million coming from iGaming and $196.7 million from onsite activities.
Record year for gambling in 2021
In terms of sports betting handle, sports betting revenue, and internet gaming revenue, Michigan achieved remarkable figures throughout the entirety of the 2021 calendar year.
In 2021, online wagering in the mitten reached an impressive $3.7 billion, resulting in a substantial revenue of $292.2 million. Notably, internet gaming alone contributed a noteworthy $1.1 billion to the overall revenue.
Online sports betting and online casinos generated a whopping $209 million in state taxes, while city taxes fell just short of $60 million.
The momentum continues into 2022, as there is no sign of things slowing down. In January, the sports betting handle reached a new record of $496.8 million. This resulted in $34.7 million in casino revenue and $1.4 million in state taxes.
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