by Scott McClallen
For years, Michiganders have gambled online illegally. But when sports betting and online gambling are legalized for the first time on Friday, the state will reap its tax revenue.
“The Michigan Gaming Control Board (MGCB) and the state’s commercial and tribal casinos will begin a new era Jan. 22 with the launch of regulated online gaming and sports betting,” Richard Kalm, MGCB executive director, said in a statement.
“Michigan residents love sports and, judging by inquiries we’ve received, eagerly anticipate using mobile devices to place bets through the commercial and tribal casinos. Online gaming and sports betting will provide the casinos with new ways to engage with customers while the state and local communities will benefit from taxes and payments on wagering revenue.”
Starting at noon Friday, 10 operators and their associated platform providers are authorized to launch.
- Bay Mills Indian Community, DraftKings
- Grand Traverse Band of Ottawa and Chippewa Indians, William Hill
- Greektown Casino, Penn Sports Interactive/Barstool Sportsbook
- Hannahville Indian Community, TwinSpires
- Keweenaw Bay Indian Community, Golden Nugget Online Gaming
- Little River Band of Ottawa Indians, Rush Street
- MGM Grand Detroit, BetMGM/Roar Digital
- MotorCity Casino, FanDuel
- Sault Ste. Marie Tribe of Chippewa Indians, Wynn
- Vac Vieux Desert Tribe, PointsBet
Under Michigan law, only the three Detroit casinos and the 12 federally-recognized tribes with Class III casinos in Michigan can be operators.
Online platforms can pair with brick-and-mortar casinos to offer online gambling, boosting casino business that has seen revenue plummet during COVID-19.
The launch will get an extra boost from Barstool president Dave Portnoy and his 1.9 million Twitter followers.
Portnoy traveled to the Mitten to hype the state’s launch of legalized sports betting while also helping small businesses.
He said he would match every dollar deposited and bet this weekend through the Barstool Sportsbook at Greektown Casino and place it into the Barstool Fund, which has raised more than $28 million to help 158 businesses struggling from COVID-19 and government restrictions.
Legalized online sports betting has been a years-long project that state Rep. Brandt Iden, R-Oshtemo Township, finally pushed through with bipartisan support in 2019.
Iden told The Center Square in 2019 that legalized gambling would protect Michiganders from illegally operating offshore websites accessible through any web browser while paving an avenue for extra tax revenue to flow to public schools and the Compulsive Gambling Prevention Fund.
Online gambling is expected to generate more than $90 million in revenue in its first year. An 8.4% tax will be levied against casinos operators.
The tax rates paid by casinos and tribes range from 20% to 28% percent based on adjusted gross receipts.
During 2020, Detroit’s three casinos paid $50.3 million in wagering taxes to Michigan compared with $117.8 million paid in 2019 on slots and table games revenue, according to MGCB.
Detroit’s casinos reported nearly $639 million in aggregate revenue during 2020 compared with a record $1.454 billion yearly revenue in 2019.
The taxes on Detroit’s three casinos for sports betting and internet gaming tax revenues will be divided:
- 30% to the city of Detroit
- 5% to the Michigan Agriculture Equine Industry Development Fund (up to $3 million per year from each tax source)
- 65% to the state Internet Sports Betting Fund or the state Internet Gaming Fund
The legal age for gambling in Michigan is 21 years or older.
– – –
Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.