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It’s incredible how much can change within a year.
In 2021, the gambling scenario in Michigan underwent significant transformations.
The introduction of legal online sports betting and online casinos on January 22, 2021 set off a series of exceptional achievements in the local industry, with record-breaking figures persisting for several months.
In 2021, Michigan secured the sixth position nationwide in terms of online sports betting handle, while also achieving a remarkable third place in Internet gaming revenue.
How does Michigan compare to the rest of the country when analyzing all the numbers of 2021?
Breaking down Michigan’s first year
Despite Michigan’s online gambling being legal for only 10 days in January 2021, the overall figures for the entire year are still remarkably impressive.
Here are the year-end totals for online sports betting.
- Total Online Handle: $3,655,278,366
- Total Online Revenue: $292,172,413
- Total Taxable Revenue: $110,588,847
- State Taxes Generated: $7,269,225
- City Taxes Generated: $4,067,107
The breakdown for internet gaming, which encompasses both online casinos and online poker, is as follows:
- Total Online Revenue: $1,113,999,385
- Total Taxable Revenue: $1,003,453,761
- State Taxes Generated: $201,667,034
- City Taxes Generated: $55,279,415
- The Tribal Operator Governing Body received payments totaling $22,393,662.
Where Michigan stacks up nationwide
In terms of online handle, Michigan ranked sixth nationwide during its inaugural year of online sports betting. However, when it came to revenue, Michigan secured the fourth position.
Let’s take a glimpse into every state that amassed a minimum of $1 million in online handle for the year 2021:
| State | Handle | Revenue | State Tax |
|---|---|---|---|
| New Jersey | $9,949143,033 | $740,274,313 | $114,657,715 |
| Illinois | $6,725,719,153 | $506,000,954 | $80,519,543 |
| Pennsylvania | $6,022,177,533 | $450,521,446 | $102,691,783 |
| Nevada | $5,254,050,503 | $194,286,000 | $13,114,306 |
| Colorado | $3,785,680,256 | $249,020,325 | $11,381,663 |
| Michigan | $3,655,278,366 | $292,172,413 | $11,336,333 |
| Indiana | $3,420,239,821 | $258,227,753 | $24,531,636 |
| Virginia | $3,221,790,714 | $285,227,753 | $24,531,636 |
| Tennessee | $2,730,459,000 | $239,872,000 | $39,300,000 |
| Iowa | $1,797,996,171 | $87,747,929 | N/A |
| Arizona | $1,226,682,920 | $119,449,364 | $4,098,055 |
Despite Michigan’s seemingly strong performance, it is worth noting that their overall taxes, including those imposed by the city, are actually one of the lowest in the country. Michigan took the lead in reported promotions, exceeding $180 million, resulting in a taxable revenue of slightly over $110 million for the state.
Breaking down iGaming becomes simpler as only five states had legalized online casinos by the conclusion of 2021.
| State | IGaming Revenue | State Taxes |
|---|---|---|
| New Jersey | $1,366,929,642 | $239,212,685 |
| Pennsylvania | $1,292,533,787 | $466,384,411 |
| Michigan | $1,113,999,385 | $279,340,111 |
| West Virginia | $57,866,221 | $9,247,106 |
| Connecticut (3 months) | $47,589,481 | $6,629,622 |
| Delaware | $10.6 million | N/A |
New Jersey, Pennsylvania, and Michigan had intense competition in the online casino industry. Michigan, also known as the Mitten, secured the third position, but remarkably contributed the second-highest amount in statewide taxes.
What Michigan did right
In 2021, five states (Arizona, Connecticut, Michigan, Virginia, Wyoming) embraced online sports betting, with Michigan undoubtedly taking the lead in terms of both online handle and revenue.
Michigan’s successful online sports betting launch on Jan. 22 showcased valuable lessons for other states. The initial launch included 10 sportsbooks and eight online casinos. This timing, right before the NFL conference championship games, allowed for enticing sign-up promotions to attract new users in the state.
There are currently 14 active online sportsbooks in the state.
During their launches, Pennsylvania and New Jersey only had three online sportsbook apps each.
In its inaugural year, New Jersey managed to generate only $157.4 million in online revenue. Despite leading the race in terms of online handle and revenue in 2021, the state now faces competition from New York. New York entered the online sports betting market on January 17th of this year.
In its inaugural year, Pennsylvania achieved an impressive online handle of $1.837 billion, accompanied by a substantial revenue of approximately $77 million.
During its last three months of the opening year, Pennsylvania faced the challenges of the pandemic. However, it achieved a significant milestone with its highest online revenue of $308.6 million in a single month during its first year. This amount contrasts significantly with Michigan’s top month in December, which reached $484.6 million.
What’s ahead in year two of online sports betting
Online sportsbooks are experiencing continuous growth across the nation, with a current count of 19 legalized states.
Last month, two states (New York and Louisiana) recently joined, and Ohio and Maryland are currently making efforts to become part of the club. Meanwhile, our friends in Ontario to the north have already scheduled a launch date of April 4.
As the launch of their app approaches, Soaring Eagle Casino could potentially become the 15th online sportsbook available in Michigan.
The state is likely interested in catching up with others, particularly in terms of tax revenue, particularly when it comes to online sports betting.
Can we anticipate a similar level of promotional numbers this year as last year’s $180 million in promotions significantly impacted the overall tax amount? Considering that the state is now entering its second year of operation.
Last year, all individuals residing in Michigan were qualified to receive new-user bonuses and deposit matches. However, in Year 2, the scenario has clearly changed significantly.
Despite being in the midst of its third year of operation, Pennsylvania still recorded over $165 million in promotions for 2021.
Interstate compacting could be 2022’s newest gift
Michigan is on the verge of a significant milestone in iGaming, which has the potential to generate even greater revenue throughout the state.
If Michigan gains entry into the Multi-State Internet Gaming Agreement, it has the potential to engage in interstate compacting. This would enable individuals from Michigan to participate in online poker games against players from other states that are also part of the agreement.
The addition of a planned launch of the World Series of Poker, along with everything else, would significantly enhance the state’s online gambling offerings.
Despite initial projections anticipating a commencement of WSOP and Michigan in the MSIGA by 2021, we find ourselves in early 2022 still awaiting developments. The Michigan Gaming Control Board recently announced that their plea to join the multi-state agreement is presently being reviewed by the participating states.
