Michigan online gambling revenue held close to even at $89.2 million in June, but BetMGM massively increased promotional spending

Michigan’s Online Casinos Take A Small Dip In June, Yet Synergy Continues With The Retail Gaming Industry

Michigan continued to rake in an impressive sum from both its retail and online casinos in June. So it appears as though Michigan is shaping up to be another state which refutes the idea that online gambling cannibalizes retail revenue. Proceeds from both forms of betting held steady in June, even as retail casinos fully reopened on June 22.

With $89.2 million in gross gaming revenue (GGR) in June, Michigan online casinos did experience a bit of a dip from May. It was only a minor one, though. GGR dropped 5.9% month over month. However, the daily average was only down 2.8%. That’s because June is a shorter month than May.

AGR paints a different picture from GGR

Online Poker Report now tracks GGR for consistency with other sites in our network and between states. This is equal to the casino’s net win or total rake collected by a poker room, without other adjustments.

However, the Michigan Gaming Control Board (MGCB) itself paints a much worse revenue picture. That’s because it is considering adjusted gaming revenue (AGR), which was down by nearly 26% on the month. AGR is equal to taxable revenue, which includes various adjustments, most importantly a deduction for free play given out to players as part of a promotion.

The MGCB explained that this larger drop is due to the largest internet casino operator in the state deducting such free play for the first time since the market opened in January.

MGM takes a 6-month promotional deduction in June

The numbers the MGCB released yesterday reflected the MGM Grand Detroit‘s deduction of $17.5 million for free play.

MGCB Communication Specialist Mary Kay Bean told OPR that free play deduction dates back to Jan. 22, when online gambling launched in Michigan.

She said:

“MGM Grand Detroit decided to defer free play deduction until they could ensure the accuracy of the deductions. In June, they took deductions for free play from January through June 30.”

Policies about such tax-free promotions vary from state to state, and New Jersey is just in the process of introducing such a deduction. However, the MGCB makes it clear that MGM can’t spend at that rate forever.

The MGCB revenue announcement said:

“[That]  deduction contributed to a 25.7% decline in internet gaming adjusted gross receipts in June compared with May results. Michigan law limits the deduction for internet casino gaming free play to 10% or less of gross receipts in the first three years after launch.”

Retail casino revenue steady

In the meantime, retail casino aggregate revenue held very steady. In June, Detroit retail casinos brought in $108.1 million, almost unchanged from $109.7 million in May. Factoring in the length of the month, the daily average actually increased 1.8%.

It’s important to note that retail casinos aren’t struggling, despite the launch of iGaming. Cannibalization is a frequent worry, most recently voiced by a lawmaker in Illinois, where Internet casino gaming hasn’t yet been legalized.

Likewise, it doesn’t seem that online casino operators need to be very concerned about players ditching their gambling apps post-pandemic as they stroll into Michigan’s fully reopened retail casinos.

MGCB Executive Director Henry Williams summed it up:

“Summer is here, and Michigan is reopening after the pandemic restrictions. So there are many entertainment opportunities. The slight tenth of a percent decline from May to June shows internet gaming and online sports betting continues to draw Michigan residents’ and visitors’ interest.”

MI online gambling revenue highlights – June 2021

Online casinos and poker rooms filled Michigan’s coffers with $89,214,138 in GGR in June, which was down from May’s $94,851,550. Daily average revenue was $2.97 million, only a small drop from $3.06 million in May.

So overall, Michigan continues to be remarkably stable for such a young market. In fact, the Wolverine State shows signs of already being almost as mature as the country’s oldest online casino marketNew Jersey.

More key takeaways include:

  • Operators declared $23,021,111 worth of spending on promotions in June, double-digits up from online casino and poker outlay in May. BetMGM is the primary driver of the increase, though it may be declaring several months worth of promotions at once, having declared $0 in previous months.
  • Online casinos and poker rooms paid $13.7 million in taxes in June, plummeting from May’s $25.2 million. This decrease is mostly due to BetMGM’s untaxed $17.5 million in free play deductions.

Michigan market analysis – by operator

BetMGM Casino (plus poker) has been the No. 1 operator every month since online gambling launched in Michigan.

The more interesting story here is the fight for second place. DraftKings Casino and FanDuel Casino keep trading that trophy back and forth.

In May, FanDuel – the No. 1 US online betting operator – finally firmly established itself as the No. 2 revenue generator in Michigan.

But in June, FanDuel dropped to No. 3, behind DraftKings.

BetMGM, DraftKings and FanDuel are known as the Big Three online casino operators throughout the country. FanDuel has the largest overall market share, combining its online casino and sportsbook results.

So the Michigan microscope is fascinating. In the Wolverine State, BetMGM Casino generated more than twice as much gross revenue as DraftKings and FanDuel put together.

  • BetMGM generated $33.8 million in June.
  • No. 2 DraftKings brought in $15.5 million, flipping places in June with FanDuel.
  • Now No. 3, FanDuel’s gross revenue was $14.8 million.

Still, their slices of the $89.2 million Michigan online casino pie gobbled up all but about 28% of it. That left a little more than $25 million for the remaining 11 operators to divide up.

More to note:

  • Despite its promotional spending, BetMGM’s GGR dipped a bit, from $36.1 million in May to $33.8 million in June.
  • FireKeepers debuted with $11,902 in GGR in June. Its formal launch announcement came from the MGCB only this month, on July 12. However, it had a limited soft launch testing period in June which generated that small amount of revenue.

Michigan sports betting – June 2021

At $25 million, June’s online sports betting gross revenue wasn’t nearly as lucrative for the state as the iGaming channel. However, it was nonetheless an improvement on May’s $19.5 million.

What’s more, since the market’s inception on Jan. 22, 2021, Michigan’s online sportsbooks have accumulated a total adjusted gross revenue of $40.5 million as of June 30. During June alone, AGR reached $16.8 million.

The June online sports wagering revenue bump was somewhat unusual, as US sports betting typically falls into a summer slump between March Madness and the beginning of the NFL football season.

Indeed, the volume of wagers has been falling in that time. June’s handle was $235.1 million – down from May’s $237.6 million. That, in turn, represented a 6% drop from April’s totals. Rising revenue in the face of falling handle means an improvement in hold, which can come down to an increase in parlay betting, or simple good luck on the part of the sportsbooks.

The top bookmaker, FanDuel, far outpaced all comers in Michigan. In June, its gross revenue in this vertical was $10.3 million. BetMGM was its nearest competitor, at $6.1 million. Surprisingly, the casino leader beat DraftKings at its game – sports wagering. DraftKings came in No. 3 – at $5 million. This echoes the situation in May.

As usual, online sportsbooks vastly outperformed the retail channel. All in-person betting combined only generated $2.3 million in gross revenue.

To go into even more granular detail about Michigan sports betting, read the latest coverage at our sister site, Legal Sports Report.

MI online gambling revenue breakdown

Individual operators have their own stories to tell. FireKeepers is on the board, as well as the ranking flip between DraftKings and FanDuel. Plus, the market totals bring the picture together.

Totals reflect what remains after deducting promotional costs, which is a departure from previous months’ reports. The amounts reflect iGaming only, i.e. online casino and poker – but not sports betting. Monthly changes are calculated as a daily average, i.e. normalized for the number of days in the month.

 June TotalMay TotalChange
BetMGM$33.8M$36.1M-6.5%
DraftKings$15.5M$15.7M-1.3%
FanDuel$14.8M$16.3M-9.1%
BetRivers$6.0M$6.6M-9.8%
Golden Nugget$4.3M$3.8M+13.1%
WynnBet$3.9M$4.3M-10.1%
PokerStars$3.3M$3.8M-14.5%
Barstool$2.8M$3.4M-15.2%
Four Winds$2.1M$1.8M+13.9%
TwinSpires$1.4M$1.5M-7.7%
Parx$0.6M$0.5M+15.5%
PointsBet$0.5M$0.6M-15.9%
William Hill$0.2M$0.3M-37.2%
FireKeepers$0.01M--N/A
All operators$89.2M$94.9M-5.9%
- Heather Fletcher is the lead writer with OnlinePokerReport. She's a career journalist, with bylines in The New York Times, Adweek and other publications. Reach her at [email protected]
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