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Michigan’s 2023 Sports Betting In Review

BetRivers’ 2023 handle doubled compared to 2022, likely due to promotional spend




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In the big-picture sense, sports wagering in Michigan in 2023 was a mixed bag. Handle was down less than one-tenth of a percent compared to 2022, with the increase in mobile betting absorbing most of the decline in retail wagering. Operator gross revenue was up slightly, adjusted revenue was down slightly, but the state saw a notable uptick in tax revenue by close to $2 million.

But in digging in a little deeper, the numbers revealed the usual suspects among mobile betting apps — FanDuel and DraftKings — posted solid year-over-year gains in handle and revenue. Some smaller digital books had bigger gains in terms of percentage, but some of the larger ones saw notable declines in handle and revenue that will cause a re-think in their approach to 2024.

A rough year for Motown’s retail books

Detroit’s three retail sportsbooks did not really take flight until football season, and the trio should be sending “Thank You” notes to the Detroit Lions and Michigan Wolverines for easing some of the sting compared to 2022 numbers. Overall retail handle declined 31.1% to $181.7 million, with that drop mitigated by the three venues seeing a combined 7.3% year-over-year increase in handle from September through December. That $81.9 million wagered accounted for more than 45% of the full-year handle compared to the $76.3 million representing 29% of the $263.7 million worth of wagers in 2022.

MGM Grand, MotorCity Casino and Greektown Casino also made the most of that increased action the final third of the year, posting a combined 13%-plus hold to claim nearly $10.7 million in gross revenue. That was more than three-quarters of the $14.1 million in full-year winnings by the three sportsbooks, but that overall amount was also down 26.3% compared to 2022. All three sportsbooks had year-over-year declines in gross revenue, with Greektown’s 4.7% dip the slightest.

MotorCity, which is powered by FanDuel, was the lone venue of the three to post higher handle in 2023 versus 2022, with the near-$65 million in accepted bets up 22.6%. That was enough to slide past MGM Grand into second place as the BetMGM book saw action plunge 42% to $45.6 million. It was a rough year for MGM Grand on both handle and revenue fronts — its 4.7% win rate was down more than three percentage points compared to 2022 and contributed to gross revenue being off nearly two-thirds at more than $2.1 million.

Even with an additional $12 million handle, FanDuel’s revenue was off 10.2% at just shy of $5.2 million. More than 88% of that came from November and December winnings as MotorCity spent most of 2023 climbing out of a deficit that reached lower than minus-$1.3 million at the end of July. Greektown again led the trio in handle, but the approximately $6.2 million separating itself from MotorCity was far narrower than 2022 when the PENN Entertainment venue accounted for more than 50% of the in-person wagering with more than $132.1 million handle.

FanDuel and DraftKings hoard more market share while BetRivers makes strides

The biggest takeaways of the 2023 mobile wagering scene in the Wolverine State were FanDuel and DraftKings further separating themselves from the other 12 mobile operators, and BetMGM taking a significant dip in action compared to 2022. FanDuel and DraftKings increased their combined market share from 55.5% to nearly 61.8%, while BetMGM dropped five percentage points. As a trio, their combined market share increased from 77.3% to 78.5%.

BetRivers had the biggest jump in terms of handle as it more than doubled to nearly $161.1 million in 2023 from $78.9 million in 2022. While the Michigan Gaming Control Board does not specify promotional breakouts among its deductions, it appears BetRivers was more aggressive on its outlays in 2023 compared to the previous year based on the wider gap between gross revenue and adjusted gross revenue.

It went from close to $3.4 million in 2022 to $7 million-plus last year, though BetRivers’ 2023 total was exacerbated by a rough final quarter when it paid out almost $650,000 on top of $74.9 million handle. That contributed to an AGR of more than minus-$3.1 million, which resulted in BetRivers finishing the year minus-$1.4 million for adjusted revenue.

Mobile Sportsbook2023 Handle2023 Market Share2022 Handle2022 Market ShareHandle Percent Change
Barstool Sportsbook/ESPN BET$278,577,5656.02%$339,761,1777.47%(18.0%)
Caesars Sports$325,971,3667.04%$341,293,3857.50%(4.5%)
SI Sportsbook$13,894,9410.30%$11,744,7380.26%18.3%
Golden Nugget$13,984,8300.30%$12,051,7850.26%16.0%
Pokagon Band$10,757,5040.23%$8,173,0920.18%31.6%
Soaring Eagle*$22,990,0190.50%$12,328,5870.27%86.5%
*Launched in April 2022
2023 Mobile Handle/Market Share vs. 2022 Mobile Handle/Market Share

In terms of mobile revenue, FanDuel was an easy winner with close to $190.9 million thanks to an 11.9% hold. That was up 16.7% compared to 2022 and slightly outpaced its increase in handle as the win rate was only five-hundreths of a percentage point higher. DraftKings also reached nine figures in gross revenue at $105 million, up 48.5% from the previous year as its 8.4% hold was up more than two percentage points compared to 2022.

BetMGM’s downturn in revenue went further than its handle, with the $67.5 million a 44.5% decline due to the win rate slipping more than a full percentage point to 8.7%. Caesars had similar issues against the betting public in 2023 — its 4.7% hold was off more than 1.2 percentage points and contributed to a near-25% decline in revenue to $15.1 million. PointsBet‘s decline in terms of percentage was just shy of 25% as the Fanatics-owned book totaled close to $8 million in winnings.

BetRivers’ bounce in revenue compared to 2022 was noticeable at 41.3%, but its win rate went only from 3.5% to less than 5.1% as gross revenue ticked above $5.6 million. ESPN BET absorbed some of the declines PENN endured with predecessor Barstool Sportsbook: Revenue was down 15.5% to $20.3 million compared to 2022, but the $11.8 million in winnings the final two months of 2023 accounted for 58% of the full-year gross revenue.

The taxman has (still) yet to cometh

Because Michigan allows operators to deduct promotional spend against gross revenue in perpetuity, there continue to be some mobile operators that have yet to pay their first dollar in state taxes going as far back as the January 2021 launch. Some casinos use sportsbooks as a loss leader for internet casino gaming, which has a more steady revenue stream on a month-to-month basis compared to sports betting.

Hannahville Indian Community, which was home to TwinSpires for the initial launch and SI Sportsbook since August 2022, still has an overall negative adjusted gross revenue of more than minus-$547,000. Less than 28% of SI Sportsbook’s $1.1 million in gross revenue was eligible for taxation by the MGCB, but the nearly $307,000 applied to its negative AGR was more than 9.5 times the $32,149 applied in 2022.

The Pokagon Band of Potawatomi Indians also have not paid state taxes since taking their first bets through Pala Interactive in February 2021, but they made a sizable dent into the minus-$2.1 million AGR they carried into 2023. Pala more than doubled its gross revenue from 2022 to over $783,000, with all but $7,170 of that total eligible for taxation. That was a swing of more than $1 million to the positive from 2022 when Pala finished with more than minus-$261,000 in adjusted revenue.

BetPARX, which operates through Gun Lake Casino, also made inroads into its negative AGR with nearly $619,000 in taxable winnings for 2023. That knocked its overall deficit below minus-$1.2 million, while its all-time spread between gross revenue and adjusted revenue is just shy of $4.2 million.

Firekeepers has finished each year with a negative AGR, though the minus-$328,000 was less than half the negative $762,000-plus accrued in 2022. Firekeepers failed to crack a 4.2% hold on gross revenue in the final quarter of 2023, contributing to an AGR of more than minus-$114,000. Its overall AGR entering 2024 was more than minus-$1.2 million.

Soaring Eagle, which launched its mobile platform in April 2022, reached the break-even point on AGR for the first time in August and paid state taxes the final five months of 2023 totaling $36,240. Its deficit reached a peak of more than $213,000 in April and closed out 2023 with its best month in terms of gross revenue ($307,144) and AGR ($180,688).

What does early 2024 hold?

The good news is Michigan sportsbooks likely started 2024 with a bang — the Wolverines beat Alabama and Washington in the College Football Playoff to win the national title while the Lions won the NFC North in Week 18 before posting playoff home wins over the Los Angeles Rams and Tampa Bay Buccaneers. Detroit will wrap up January with its biggest game in franchise history Sunday — playing the San Francisco 49ers on the road with its first Super Bowl appearance at stake.

Bettors in the Wolverine State gleefully jumped on both bandwagons. Total statewide handle from September through December was more than $2.22 billion, up 18.3% from the comparable period in 2022, and January handle should track to an all-time high for the fourth consecutive month.

Michigan sportsbooks could also benefit from the Detroit Red Wings being playoff contenders in their bid for a first NHL postseason appearance since 2016. Detroit currently occupies one of the two wild-card spots in the Eastern Conference but is only five points out of second place just past the halfway point of the season. Bettors who have been fading the four-win Pistons may be eyeing the NBA calendar with intent as eight of their 10 games in February are on the road, including a five-game West Coast trip.

Michigan State could very well be the only in-state school to make the men’s NCAA Tournament come March, with the Spartans finally showing resemblance to their top-five preseason ranking. Detroit’s sportsbooks could get a boost in late March when Little Caesars Arena hosts the regional semifinals for the NCAA Tournament.

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