iCasino Records Banner First Year In Michigan

Online casinos brought Michigan more tax revenue than sports betting did in 2021

Just over a year ago, on Jan. 22, 2021, Michigan casino and mobile Michigan sports betting launched, and Michiganders have taken advantage of both offerings in the year since. 

Several major national sportsbooks launched in the state in 2021, partnering with retail locations to join the state’s betting market. Barstool Sportsbook, BetMGM Sportsbook Michigan, Caesars Sportsbook Michigan, DraftKings, and FanDuel Online Sportsbook are among the operators with mobile offerings in Michigan. 

Michigan offering sports betting isn’t all that unique, as over 30 states and jurisdictions in the U.S. offer sports wagering, but iCasino offerings really help Michigan stand out from other states. Only a handful (Connecticut, Delaware, New Jersey, Pennsylvania, and West Virginia) offer iCasino gaming, which tends to draw significant revenue. 

Several of the online sportsbook operators are also involved with Michigan’s iCasino industry, as BetMGM Casino, BetRivers Casino, Caesars Casino MI, DraftKings Casino Michigan, FanDuel Casino, Golden Nugget, and WynnBET Online Casino all offer iCasino options in Michigan. 

iCasino gaming generates $1 billion in gross receipts

Commercial and tribal internet casino gaming and online sports betting operators combined to record $1.4 billion in total gross receipts in 2021, according to the Michigan Gaming Control Board (MGCB). Internet casino gaming accounted for $1.1 billion in gross receipts, while online sports betting produced roughly $292 million. 

Adjusted gross receipts were $1.1 billion for iCasino and online sports betting combined, with internet casino gaming accounting for $1 billion of that figure. Clearly, online casino gaming is a massive industry with potential to generate tremendous sums of money.

Life seems good for the iCasino operators in Michigan, as they had a banner month in December to close out 2021. Online casinos recorded nearly $122 million of gross receipts in December, a record within Michigan. BetMGM led the way, recording nearly $46 million in gross receipts in December.

Michigan received substantial tax revenue from iCasino gaming, taking in $201.7 million from internet gaming taxes and fees, while online sports betting tax revenue amounted to about $7 million. It’s worth noting that Michigan taxes iCasino gaming more than online sports betting, with a tax rate ranging from 20-28% on online casino gaming and an 8.4% tax rate on online sports betting.

Where does the tax revenue go?

When it comes to iCasino gaming, 65% of the tax revenue generated from non-tribal operators is allocated to the Internet Gaming Fund. Another 30% of tax revenue from those non-tribal operators goes to the City of Detroit, and 5%, up to $3 million, goes to the Agriculture Equine Industry Development Fund (AEIDF). 

As for tribal operators, 70% of tax revenue from online casino gaming goes to the Internet Gaming Fund, 10% goes to the Michigan Strategic Fund, and 20% goes to local governing bodies. If you’re confused about what “Internet Gaming Fund” means, the MGCB breaks down where money from that fund is distributed, in order of priority.

  • Payment to the City of Detroit IF the total gaming-related tax revenue received by the City of Detroit falls below $183 million for the preceding fiscal year. However, the total of this payment can never be more than 55% of the total gaming tax deposited in the Internet Gaming Fund, minus the 30% internet gaming tax revenue received by the City of Detroit. 
  • MGCB regulation and enforcement of act. 
  • $500,000 to the Compulsive Gaming Prevention Fund.
  • $2 million to the First Responder Presumed Coverage Fund. 
  • Remaining balance to the School Aid Fund (K-12 education) at fiscal year-end. 

Long-term impacts

Legal online sports betting and iCasino gaming are still relatively young in Michigan, but there’s some concern about problem gambling increases within the state. According to a recent report from FOX 17, there were 1,591 calls to the Michigan Problem Gambling Hotline in 2020. In 2021, with legalized mobile betting and online casino gaming, the hotline received 3,640 calls. 

A quick glance at that number makes it seem like problem gambling has increased given the access to legal gambling measures, and there are likely more people with gambling issues that didn’t call the hotline. Still, more time is needed to determine the potential gambling addiction impact created by legalizing mobile betting and online casino gaming within the state. 

“I think it’s going to take a little more time before we’re able to actually use the numbers as a definitive measure to determine if this increased access to gambling is significantly increasing or propelling gambling disorder activity,” Alia Lucas, the gambling disorder program specialist with the Michigan Department of Health and Human Services (MDHHS), told FOX 17.

As for the positive impacts, the tax revenue coming back to the state can certainly be considered a plus, as the state received over $200 million in tax revenue from sports wagering and online gaming in 2021. Much like the problem gambling concerns, it could take years to fully understand the positive impacts of legalized online casino gaming and sports wagering, although the American Gaming Association cited some positive impacts caused by casinos in the state in 2020.

Image: Shutterstock


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