12 Months In Michigan: Sportsbook Revenue Up, Detroit Action Down, FanDuel Reigns

FanDuel’s dominance in Michigan mirrors a national trend of improved operator performance

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Michigan 12-month sports wagering snapshot

With the exception of two very distinct occurrences, it has largely been a rough 12-month period for Michigan sports bettors.

In reviewing sports wagering figures provided the Michigan Gaming Control Board covering July 2022 through this past June, operator gross revenue climbed 20.6% versus the 12-month period from July 2021-June 2022 despite a 6.5% drop in handle. The statewide hold of 9.7% likely reflects the ongoing evolution of bettor preferences for parlay wagering over single-event wagering. (“Likely” is used because the MGCB does not disclose handle and revenue by sport and wager types, only by operator.)

FanDuel’s mobile sportsbook is the primary agent of change, serving as both the market leader in the Wolverine State and the first mover nationally with the same-game subset of parlay wagering.

FanDuel’s retail sportsbook at MotorCity Casino in Detroit provided two distinct occurrences counter to its mobile dominance. Payouts totaling seven figures on four two-leg parlays in April and one near seven-figure payout in June prevented an even higher overall hold in Michigan.

More operator revenue despite less handle

TIME PERIODSPORTS WAGERING HANDLEGROSS REVENUEWIN RATESTATE TAXES
July 2021 – June 2022$4,793,288,258$362,171,4747.56%$10,411,644
July 2022 – June 2023$4,484,273,282$436,656,5119.74%$16,724,329
Percent Change-6.45%20.57%28.84%60.63%

Michigan sportsbooks largely followed the national trend of greatly improved operator performance in the 12-month span running from July 2022 through June.

The statewide hold spanning the past year of reports is nearly 2.2 percentage points better than the same period in 2021-22, and the hold reached 10% or higher in eight of the last 12 months. Operators accepted close to $4.5 billion worth of wagers in this span, which was down 6.5% versus the July 2021 to June 2022 period.

Despite this $309 million decline in handle, gross revenue surged 20.6% — or nearly $74.5 million — to $436.7 million. There are a handful of reasons revenue was able to climb despite a drop in the amount of dollars in bets placed.

Parlay wagering and FanDuel’s dominance go hand in hand. Parlays, especially during NFL season, are now a staple of the wagering scene and a key source of operator revenue. It is not a coincidence that once the league named FanDuel, DraftKings, and Caesars official partners in 2021, sports wagering took off in the United States. The outsize attention NFL news receives on a year-round basis reflects its status as America’s current pastime and also gets reflected in wagering.

A lesser reason is Detroit sports teams have been, to be blunt, awful. The Lions, Pistons, Tigers, and Red Wings have collectively not played a postseason game since Michigan’s first wagers were placed in March 2020, and only the Lions have improved to the point where they’re now somewhat respectable. They are a trendy pick to make their first postseason appearance since 2016 after going 9-8 last season.

Good local sports teams matter because they can dramatically alter a state’s bottom line for operator revenue. The Chiefs winning the Super Bowl in February resulted in Kansas operators collectively finishing in the red in February. Nevada and Colorado provided more proof in June — sportsbooks in the Silver State lost $6.6 million in hockey wagers as the Golden Knights won the Stanley Cup, while Centennial State pro basketball bettors came out $10.8 million ahead backing the Nuggets to win their first NBA title.

Lack of Motown action

TIME PERIODSPORTS WAGERING HANDLEGROSS REVENUEWIN RATE
July 2021-June 2022$315,602,023$22,582,8957.16%
July 2022-June 2023$187,985,725$13,833,4637.36%
Percent Change-40.43%-38.74%2.79%

There is little reason for someone with a local rooting interest to set foot inside a retail sportsbook when the city’s teams struggle, and bettors in neighboring Ohio haven’t had to make a run to Detroit to place a wager since the Buckeye State launched sports wagering at the beginning of this year.

In the July 2022-June 2023 period, in-person wagering at Detroit’s three casinos plunged more than 40% to $188 million versus the 2021-22 span. Revenue plunged right with it, falling 38.7% as the improvement in the win rate was both marginal and close to the industry standard at 0.2 percentage points and 7.4%, respectively.

Though all three sportsbooks in Detroit are big-time mobile players in BetMGM, FanDuel, and Barstool Sportsbook, they do not get as much parlay action as their online counterparts, mainly due to convenience. It could take a few minutes, even at a self-serve kiosk, to get a ticket for a multi-leg parlay compared to a few taps, swipes, or mouse clicks on a smartphone or computer.

TIME PERIODMOBILE HANDLEGROSS REVENUEWIN RATE
July 2021-June 2022$4,477,676,266$339,589,0837.58%
July 2022-June 2023$4,296,288,011$422,976,7409.85%
Percent Change-4.05%24.56%29.95%

The increase in operator gross revenue was in line with national trends. The 9.7% overall win rate in the most recent 12-month stretch also contains a 10.1% hold from July 2022-December 2022 during the bulk of the NFL season. Year-over-year mobile handle was up 3.4% in the latter July-December six-month span, but revenue was up a whopping 34.8%.

Of the state’s 15 mobile operators, 12 were active for both full 12-month spans used in comparisons. Nine of those sportsbooks posted gains in the second 12-month span, while bettors performed better versus the other three. But those three online operators — Golden Nugget, WynnBET, and Firekeepers’ in-house app — represent less than 1.5% of the total mobile handle at $63.4 million. In other words, they amounted to no big loss in the big picture.

MOBILE OPERATORJULY 2021-JUNE 2022 HOLD (GROSS REVENUE)JULY 2022-JUNE 2023 HOLD (GROSS REVENUE+/- CHANGE IN PERCENTAGE POINTS+/- CHANGE IN PERCENTAGE
BetMGM8.87%9.67%0.809.0%
FanDuel10.15%14.03%3.8838.2%
Barstool Sportsbook5.92%6.32%0.406.8%
DraftKings5.07%7.43%2.3646.5%
Caesars4.35%6.55%2.2050.6%
Golden Nugget7.50%5.20%-2.30-30.7%
PointsBet7.87%8.65%0.789.0%
BetRivers5.76%5.78%0.020.3%
FOX Bet6.14%7.51%1.3722.3%
Four Winds (Pokagon)3.36%7.06%3.70110.1%
WynnBET6.40%5.16%-1.24-19.4%
Firekeepers3.80%0.78%-3.02-79.5%

FanDuel mainly taketh and occasionally giveth

Without specific wager-type data from the MGCB, it is difficult to quantify just how much of a game-changer same-game parlays have been for FanDuel and how much they’ve skewed the state’s hold. In Illinois, the online juggernaut had a 26.8% hold on parlays in May, as those wagers accounted for 31.5% of FanDuel’s total handle and 67.5% of its revenue in the No. 2 market nationally.

Parlays are marketed relentlessly by FanDuel and others, helping raise operator bottom lines. Practically every mobile sportsbook has an “SGP” play on its landing page for a bettor to consider. Another factor in the rise in revenue is a notable portion of parlay bets placed are low-amount wagers of $1, $5, and $10.

Some bettors may find their $5, eight-leg parlay at +9523 similar to purchasing a lottery ticket, but the parlay bet can also create a different mindset. Missing a large payout by one leg with what can often be labeled disposable income can encourage trying another parlay as opposed to shrugging off a computer spitting out random numbers that fail to defy the infinitesimal odds of winning Mega Millions or Power Ball.

Michigan bettors are certainly not alone when it comes to being rocked by FanDuel. In the 11 states and jurisdictions that have provided June handle and revenue by operator, Washington, D.C., was the only one in which it posted a win rate below 10.25%. FanDuel’s June rate was 13.7% in the Wolverine State, the seventh time in the last 10 months it was above 13%.

RETAIL TIME SPANHANDLEGROSS REVENUEWIN RATE
July 2021-June 2022$72,185,843$6,716,1969.30%
July 2022-June 2023$47,050,685$2,387,9405.08%
Percent Change-34.82%-64.45%-45.38%
Mobile Time SpanHandleGross RevenueWin Rate
July 2021-June 2022$1,235,471,609$125,186,99810.13%
July 2022-June 2023$1,392,720,072$195,394,06614.03%
Percent Change12.73%56.08%38.50%

That was just off the 14% win rate FanDuel achieved over the last 12 months — double the industry standard. It also bucked Michigan’s overall decline in mobile handle, reaching close to $1.4 billion in accepted wagers.

The robust hold sent gross revenue soaring to $195.4 million — $70.2 million higher than the previous 12 months — and accounted for nearly 95% of the overall revenue gain statewide. FanDuel currently has an eight-month streak of at least $10 million in gross revenue in Michigan and is the only mobile operator to clear $20 million in the state. Its top rival, DraftKings, has topped $10 million just twice since launch.

There’s always room for a little hope

Those two huge payouts at MotorCity Casino helped drive down operator gross revenue 64.4% at the brick-and-mortar sportsbook in the past 12 months versus 2021-22. In April, a bettor won four $10,000 two-leg parlays worth more than $2.6 million thanks to Connecticut winning the NCAA Tournament at odds of +3500. This past month, an undisclosed bet type paid out $972,000.

To put those payouts in perspective, MotorCity’s win rate had it won those bets would be close to 10.8% for the last 12 months, and its revenue would have been down only 24.6%. The overall statewide hold would have been nearly one-tenth of a percentage point higher and above 9.8%.

It is possible the latter win could be a springboard for better things to come, and it’s also possible the Lions may live up to their newfound expectations and serve as a catalyst for a retail sportsbook resurgence that includes the public winning more. But based on the past 12 months, the smartest course of action is to wager on each of those outcomes separately rather than parlay them together.

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