So far, online casinos are legal in seven states, Michigan being one of them.
And Michigan provides a phenomenal example of how much more lucrative for the operator online casinos are compared to online sportsbooks.
The Michigan Gaming Control Board provides detailed information about each sportsbook and online casino, and due to the nature of the law in Michigan, each online casino is partnered with one brick-and-mortar operation, making for an easy apples-to-apples comparison between casinos.
Since the launch of online sportsbooks and casinos on Jan. 22 — and through October — the sportsbooks have made $65.2 million in adjusted gross sports betting receipts (the “adjusted” means promo play is eliminated from this number).
On the casino side? Try $797.4 million in adjusted revenue. Yes, that’s right — the online casinos are, so far, 12 times more profitable than the online sportsbooks.
In a very real way, online sportsbooks can be seen to exist as a funnel to get more people into the online casinos.
And we might be witnessing the beginning of a gold rush of sorts, as two operators — Caesars Casino Michigan and, to a lesser extent, Barstool — seem to be upping the game in their efforts to move sports bettors over to the casino.
Promo money unleashed
Most operators — DraftKings Casino MI being notable among them — have been pushing casino play on their sports betting pages via promos. DraftKings, almost daily, offers “bet $10 (or more), get $5 in free credit” promos. Sometimes they are more +EV, sometimes less. BetMGM Online Casino — the clear online casino market leader in Michigan — also offers daily promos, from 10 free spins on the slot game Starburst to twice-weekly “click card” promotions, with up to $10 in bonus casino money available.
But in recent weeks, Caesars has been offering online casino bonus promotions usually reserved for new sign-ups. The most notable among them — and the company has offered it for at least the last two weeks — is the “Percentages for the People” promotion, in which people who deposit up to $500 will get an additional 50% in casino bonuses.
The caveat to this, and all casino bonuses, is the play-through requirement, which range anywhere from 4X to 100X depending on the site and the promotion. But still, $250 in casino bonus money is nothing to sneeze at.
Additionally, Caesars has been offering “flash” bonuses, up to $100 in casino bonus money with a $100 deposit.
Barstool has also gotten into the act in recent weeks, with a $50 bet netting the user $25 in casino bonus funds. They also offered a “Fight Night” UFC-themed bonus, with up to $50 in casino bonus money if you deposited $250.
These big bonuses offer little downside for the operators, as the play-through requirements make it very tough, outside of a big jackpot, for a bettor to be able to pull out their money. But the upside is there for the operators — namely, securing themselves another online casino player in the clearly highly profitable world of online casino gaming.
“Sportsbooks are a hard business to make money in, but it’s a great business to attract customers,” said John Pappas, the state advocacy director for iDEAGrowth, an organization that helps in the legislative and regulatory process for sports betting and online casinos. “The cross sell between the sportsbook and the casino is the next wave in the industry. No doubt about it.”
Race to the top
It’s also worth noting how Barstool and Caesars are positioned, especially in Michigan.
Right now — and really, since launch — BetMGM is the dominant force in Michigan’s online casino world, accounting for 37% of all adjusted gross receipts in the state. FanDuel Casino Online and DraftKings come in a distant second and third, respectively, each accounting for a little less than 17% of the adjusted gross receipts.
Barstool — which didn’t launch its casino product until about a month after the big three — has about 3.6% of the adjusted gross receipt pie, though its number has been trending up. As for Caesars? They aren’t even at 1% of the adjusted gross receipt take. Since the rebrand from William Hill in August, however, numbers are up dramatically, from $296,000 and change in July to more than $1.7 million in October, with the number rising each month.
Can either of these casinos hope to catch DraftKings or FanDuel, never mind BetMGM, in Michigan? Probably not, at least not for a very long while. But the casino pie is only growing, and Barstool and Caesars may be laying groundwork for their eventual launch in other states, and it wouldn’t surprise to see other sportsbooks and their casino arms start to play catch up. In short: Promo money in the online casino space may be primed to explode.