FanDuel Leads the Pack In Michigan Online Sports Betting, Providing State Tax Revenue

Written By Drew Ellis on May 26, 2022

In Michigan, there is no shortage of options for online sports bettors.

With 15 different operators, players can find the option that makes them most confident when placing their wager.

In the more than a year online sports betting has been legal in the state, FanDuel Sportsbook MI has been the driving force in the market.

Along with leading in the online handle and revenue department, FanDuel has been the clear leader in tax revenue for Michigan.

FanDuel the established sports betting leader in Michigan

Legalized online sports betting in Michigan started in late of January 2021. Since that time, FanDuel has led the field in online handle 12 of the 16 months with revenue information. It also has led in online revenue in 10 of the 16 months and in state tax revenue generated in 11 of the 16 months.

What that means overall is FanDuel has set the bar for other operators to pursue.

Here’s a look at where FanDuel stands in all-time sports betting data:

  • Online Handle: $1.5 billion (1st)
  • Online Revenue: $155.5 million (1st)
  • Promos: $56.4 million (3rd)
  • State Taxes Generated (online & retail): $5.5 million (1st)
  • Local Taxes Generated: (online & retail) $3.9 million (1st)

FanDuel’s vital for MI’s taxes

While leading in most of the positive categories for FanDuel’s business, the operator has been crucial for the state.

As we’ve focused on, the tax revenue generated by online sports betting is a drop in the bucket compared to that of online casinos.

When it comes to taxes generated by online sports betting, FanDuel is definitely carrying the load in Michigan.

All-time, Michigan has generated $12.7 million in state taxes from legalized sports betting. FanDuel, along with its retail counterpart of MotorCity Casino is accounting for 43.4% of that total.

It should be noted that retail tribal operators don’t have to report their earnings to the MGCB, so the three Detroit casinos can skew the data somewhat when factoring in retail numbers.

When strictly looking at online tax revenue, FanDuel has accounted for $4.9 million of the state’s $10.8 million total. That is 45.4%.

If you remove BetMGM Michigan ($3.2 million) from the equation, FanDuel has generated more state tax than the other 13 operators combined.

When it comes to Detroit/local taxes, FanDuel/MotorCity has generated $3.9 million. That amounts to 46.8% of the $8.34 million total all-time.

Few operators contributing to taxes

We recently took a look at how the tax revenue is generated for online sportsbooks, and also looked at how promo deductions play a factor in the revenue.

Online sports betting draws in so little tax revenue compared to online casinos due to the different tax rates and deductions allowed.

Just looking at April’s revenue numbers, few of the tribal operators have had to contribute any state taxes through their online sports betting platform.

The reason being, once the Gross Sports Betting Receipts are tallied, the amount of promos and free wagers are then deducted from the total to calculate the Adjusted Gross Sports Betting Receipts.

The taxes are taken from the AGR. So, when operators have an AGR in the negative, no taxes can be taken.

Even looking at the all-time revenue, six different online operators have not generated a single cent in state tax revenue since January of 2021.

Despite these low numbers compared to online casinos, Michigan legislators have no desire to adjust their current deduction agreements with operators.

How do the bettors factor in?

Part of the reason for low tax revenue can also be because of successful betting.

Michigan sports bettors are a competitive group, some more knowledgeable (or lucky) than others.

Since sports betting was legalized in March of 2020, Michigan has a 7.8% hold rate all-time.

That means that sportsbooks are keeping 7.8% of all of the wagers made. The lower the percentage, the more successful the bettors have been.

To compare to some other states:

  • Tennessee: 8.6%
  • Virginia: 8.4%
  • Indiana: 7.7%
  • Pennsylvania: 7.4%
  • Illinois: 7.1%
  • New York: 7.0%
  • New Jersey: 6.7%
  • Colorado: 6.2%
  • Iowa: 6.0%
  • Nevada: 5.7%

Of the 25 states that report sports betting revenue numbers, Michigan ranks 12th in hold.

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Drew Ellis

Drew Ellis has lived in Michigan his whole life, and has been writing professionally for the last 21 years. Ellis has covered anything from youth baseball in mid-Michigan, a top-25 college football program, and pro sports in the Detroit area. Always keeping busy, Ellis also has over 10 years of experience in covering sports betting, handling all major sports.

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