Michigan’s February tax revenue from sports betting was just $142,239 but iGaming tax revenues for the Wolverine state topped $14 million.
Legal online sports betting is often seen as a golden ticket for US states looking to boost their tax revenues, particularly with shortfalls due to COVID enforced closures.
However, the latest figures from Michigan, who legalized both sports betting and iGaming in January, shows how important it is for a state to not only pass bills allowing gambling on sports but also online casino.
The Wolverine State received a total of $142,239 in operator taxes from sports betting in February, but the iGaming tax revenues topped $14 million.
This is because the taxation on sports betting comes on profits by the online sportsbooks, which is calculated on revenues after costs of promotions paid to entice in customers. In February, the first full month of legal gambling in Michigan, the sports betting handle totalled $301.8 million for a $9.5 million gross revenue. However, after promotions paid to players were subtracted there was a net sports betting loss of $10.7 million.
This is in contrast to the iGaming revenues, which were $79.7 million in February. This resulted in taxes paid to the state of $14 million, and shows clearly where the highest profit margins are for any states looking to legalize online gambling.
BetMGM accounted for $26.9 million or 34% of the state’s total online casino market share with FanDuel had the second-highest revenue total at $16.6 million. DraftKings accounted for $14.5 million, while FoxBET/PokerStars and Barstool were slightly behind at $5.7m and $5.5m respectively.
FanDuel had the highest sports betting market share at $87.2 million with BetMGM taking in $75.7 million and DraftKings $73 million. Barstool Sportsbook was responsible for $40.3 million in handle, which was significantly down on their January launch market share, while the other operators made up just 8% of the total Michigan sports betting handle.
Michigan is currently second in the Wedge Index, behind New Jersey and it is this commitment to legal iGaming that puts those two some way ahead of their rivals, who have yet to allow online casino gambling.