FanDuel Leads the Pack In Michigan Online Sports Betting, Providing State Tax Revenue

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Online sports bettors in Michigan have a plethora of options to choose from.

Players have the opportunity to select from a variety of 15 operators, enabling them to choose the option that instills the highest level of confidence when placing their wager.

FanDuel Sportsbook MI has been the dominant force in the online sports betting market since its legalization in the state over a year ago.

FanDuel has not only been a frontrunner in terms of online handle and revenue, but it has also emerged as the undisputed leader in generating tax revenue for the state of Michigan.

FanDuel the established sports betting leader in Michigan

In late January 2021, online sports betting was legalized in Michigan, marking the beginning of a new era. Over the course of 16 months, FanDuel has emerged as the dominant player in the online betting landscape. It has consistently led the field in terms of online handle for 12 of those months, showcasing its popularity among bettors. Additionally, FanDuel has secured the top spot in online revenue for 10 months, highlighting its successful financial performance. Moreover, the platform has contributed significantly to the state’s tax revenue, leading in this aspect for 11 months out of the 16.

Overall, this signifies that FanDuel has established a benchmark for other operators to strive for.

Let’s take a glance at the position of FanDuel in historical sports betting data.

• $1.5 billion (1st) Online Handle
• The online revenue stands at $155.5 million, securing the first position.
• The promotion generated a significant revenue of $56.4 million, ranking it third highest among all promotions.
• First place in generating state taxes, both online and in retail, with a total of $5.5 million.
• The amount of local taxes generated from online and retail sources reached an impressive $3.9 million, securing the first position.

FanDuel’s vital for MI’s taxes

FanDuel has played a crucial role in the state, leading in most of the positive categories for their business.

As previously emphasized, the tax revenue generated by online sports betting pales in comparison to that of online casinos.

FanDuel is undeniably shouldering the tax burden in Michigan when it comes to taxes generated from online sports betting.

Michigan has generated a total of $12.7 million in state taxes from legalized sports betting. Out of this amount, FanDuel, in partnership with its retail counterpart MotorCity Casino, accounts for 43.4%.

It is important to mention that retail tribal operators are not required to disclose their earnings to the MGCB. As a result, when considering retail numbers, the data can be somewhat distorted by the three Detroit casinos.

FanDuel’s online tax revenue alone amounts to $4.9 million, contributing to 45.4% of the state’s total of $10.8 million.

Excluding BetMGM Michigan ($3.2 million), FanDuel alone has contributed a greater amount of state tax revenue compared to the combined total of the other 13 operators.

FanDuel/MotorCity has contributed $3.9 million to Detroit/local taxes, which accounts for 46.8% of the $8.34 million total generated historically.

Few operators contributing to taxes

In our recent analysis, we examined the methods of tax revenue generation for online sportsbooks, alongside the significant influence of promo deductions on their overall revenue.

The reason why online sports betting generates significantly less tax revenue compared to online casinos is primarily due to the variations in tax rates and permissible deductions.

After analyzing the revenue figures for April, it is evident that only a small number of tribal operators have been required to pay state taxes through their online sports betting platform.

After calculating the Gross Sports Betting Receipts, the Adjusted Gross Sports Betting Receipts are determined by subtracting the amount of promos and free wagers from the total.

Taxes are deducted from the AGR. Therefore, if operators have a negative AGR, no taxes can be deducted.

Since January 2021, six different online operators have failed to contribute any state tax revenue, even when considering their all-time revenue.

Michigan legislators have no intention of revising their current deduction agreements with operators, despite the relatively low figures in comparison to online casinos.

How do the bettors factor in?

Successful betting can also contribute to the low tax revenue.

Some Michigan sports bettors possess a higher level of knowledge or luck, making them more competitive than their counterparts.

Michigan has maintained a 7.8% hold rate overall since the legalization of sports betting in March 2020.

This indicates that sportsbooks are retaining 7.8% of total wagers placed, with lower percentages indicating higher success rates among bettors.

In comparison to other states,

• The percentage of Tennessee is 8.6%.
• The percentage of Virginia is 8.4%.
• The percentage of Indiana is 7.7.
• The state of Pennsylvania has a 7.4% statistic.
• The percentage of Illinois is 7.1%.
• The percentage in New York is 7.0%.
• The percentage of New Jersey is 6.7%.
• The percentage of Colorado is 6.2%.
• The rate in Iowa is 6.0%.
• The percentage of Nevada is 5.7%.

Michigan holds the 12th position among the 25 states that disclose sports betting revenue figures.

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