Sportsbooks have been eagerly awaiting the launch of legalized Vegas casino online style sports betting in Michigan. The first month has been rocky but the numbers are cause for optimism that the state can look forward to some serious and much-needed revenue in the coming months.
First Month
Online casino sports betting in Michigan launched on January 22 2012. Michigan allows both retail and online sports betting and, from the beginning, it has been clear that the online sportsbooks are going to do well. In the first 10 days of legalized sports betting, from January 22nd 2021 to January 31 2021, handle was $115.2 million in Michigan. When compared to the retail handle of $35.7 million reported for the first 22 days of January, the forecast seems clear that Michiganders prefer the online options.
Michigan is the first state to launch online sports betting together with iGaming. At launch date, Michigan had 11 live online sportsbooks, all of which invested heavily in promotions – including bonus offer redemptions -- to the tune of $18.5 million. Even accounting for that deduction, Michigan’s state coffers took in a healthy $13.3 million in January 2021.
Michigan’s tax and payment rate for online sports betting is set at 8.4% and the tax and payment rate for online gaming is between 20% and 28%, depending on the game being played.
Innovative
Michigan’s sports betting framework is an innovative one in which each sportsbook is partnered with a Michigan tribal land-based casino or a Detroit retail casino. The demand for online betting during the first week of legalized sports betting in Michigan was so high that it caused the BetMGM app to crash -– the app was fixed by the end of the day, though users continued to have sporadic difficulties in redeeming the app’s $200 free bets special offers.
An American Betting Experts survey of 100 Michigan sports betting players after the first weekend of legalized betting found that 81% of respondents reported that their experiences were "mostly positive."
Banking Transactions
The new sports betting scene drew both big bettors and budget wagering players. There were reports of losses of up to $100,000 during the first week of betting though those punters were identified as owners of businesses involved in the sports betting industry who were celebrating Michigan’s entry into the world of sports betting.
Some Michigan credit card issuers, including Comerica, have prohibited the use of credit or debit cards for online gambling. These banking institutions say that because the online platforms each have their own regulations and challenges, they need to wait to see how various policies are sorted out before they offer services to the sportsbooks.
Gambling with a credit card is permitted in Michigan, as opposed to a locale such as, for instance, the UK, where credit cards may not be used at all at gambling platforms. But in Michigan, banks are opting out of offering the option and observers say that it may be up to 6 months until there is agreement on how to handle debit and credit card debit from casino transactions.
In the meantime, bank or wire transfers seem to be the accepted methods for betting in Michigan, along with ewallet transactions. VISA, DiscoverCard and American Express said that they may decline the charges because the banks don’t always process them. It’s recommended that gamblers who want to charge their bets to their credit card read the fine print on the card because, for some, gambling is considered a cash advance and involves lower credit limits, higher interest rates and fees and no grace period on repayments.
Research in the UK showed that 22% of online bettors who used credit cards to place their bets are problem gamblers. In Michigan Comerica has decided, for now, to avoid the risk of being held to account for these types of gambling charges.
Comerica is continuing to “monitor the federal and state legal and compliance framework surrounding internet gambling for guidance how to safely provide banking services to avoid security issues. According to American Banker, a banking industry trade publication, they are concerned about "inadvertently facilitating financial crimes and being punished by federal authorities."
Tribal Casinos
A total of 11 commercial and tribal casinos are licensed to offer online sports betting or a combination of online gaming along with the sports betting in Michigan. People within Michigan can access any of the casinos’ apps to place bets, giving the casinos new ways to interact with customers and the state an opportunity to benefit from the taxes and payments on betting revenue.
Licensed online betting apps for online gaming and sports betting in Michigan are available through multiple tribal casinos including the Match-E-Be-Nash-She-Wish Band of Pottawatomi , Bay Mills Indian Community, Little Traverse Bay Bands of Odawa Indians, the Nottawaseppi Huron Band of the Potawatom, the Grand Traverse Band of Ottawa and Chippewa Indians, the Hannahville Indian Community, the Keweenaw Bay Indian Community, the Little River Band of Ottawa Indians and the Sault Ste. Marie Tribe of Chippewa Indians. Each of these tribes/communities has paired with a sportsbook – Bay Mills is with DraftKings, Grand Traverse is with William Hill, Hannahville is with TwinSpires, etc.
The Nottawaseppi Huron Band of the Potawatom, which operates the Firekeepers Hotel and Casino in Battle Creek, recently set up a sportsbook with live teller windows as soon as sports betting was legalized in Michigan. Now it has launches iOS and Android apps and has outfitted its online sportsbook with self-service kiosks and a myriad of big-screen TVs. “We have been working and planning for the legalization of sports betting for over a year and a half,” Firekeepers Vice President of Marketing Jim Wise to WWMT. “We are all very excited for this to become a reality but before that happens we have a lot of work to do.” Firekeepers will partner with SG Digital to operate its online sports betting apps.
Michigan’s tribes were the first to support a sports betting law and they expect mobile to level the playing field so that they can compete with the casino giants in Detroit. Now, even small tribes can partner with brand-name online sportsbooks and capture significant mobile revenue by marketing to the entire state. Scott Hughes, a government policy attorney and tribal gaming specialist told MiBiz “This presents an opportunity for the entire casino industry to offer a new product that seems to have a high level of demand, as reflected in other states. And the state has a good revenue-generating opportunity here.”
