In the first full month of legal online sports wagering in Michigan, the state’s sports fans appeared to have this betting thing handled at least as well as everyone else in the US.
After just 10 days of hiccups in learning how to beat the house in late January, the public had an outstanding February and were obviously on their way to years of prosperity in the new sector.
Of course, February’s 28 days were actually an anomaly, a small sample size in a market still too young from which to glean many absolutes.
But in the first few months of Michigan sports betting, the wagering public appears to be near the level of the industry average.
All that said, perhaps the local sports teams could help local sports fans win a few more bets here and there.
What is ‘sports betting hold’? How does Michigan’s compare?
Hold is a pretty simple concept: It’s how much the house keeps after paying out winning bets.
So, in May, Michigan sportsbooks took in $257.7 million in sports bets online and in Detroit retail sportsbooks.
Sportsbooks reported gross gaming revenue of $21.2 million, meaning the hold rate was 8.2%.
The books then subtract promotional spending, such as free bets, in a write-off. With strong market competition, there are a lot of promos out there. So early in the lifespan of Michigan sports betting, that adjusted revenue — what operators pay taxes on — is low.
Anyways, Michigan sportsbooks keeping 8.2% of wagering amount in May is about in line with the average since the state’s sports betting market opened in some retail locations on March 11, 2020.
Through May 2021, Michigan sportsbooks were holding 8.1% of total bets.
But there’s good news for bettors: That number is expected to go down in time.
Sportsbooks hold more retail bets than online
Detroit’s three sportsbooks started taking bets a few days before the pandemic shut down much of the country.
Later, several tribal casinos across the state also opened their own sportsbooks, though those numbers aren’t reported publicly.
But there was $130.7 million in sports bets made in the Detroit casinos in 2020, with $18.3 million of revenue. That’s a hold percentage of 14.0%.
In 2021, $128.2 million had been wagered at Detroit casinos through May with $10.3 million of revenue, an 8.0% hold.
Through May, Detroit retail casinos have held $28.6 million of $258.9 million bets since launching, an 11.0% hold.
Since Michigan’s online sports betting market launched, $94.9 million of the state’s $1.26 billion in bets have been held by sportsbooks, good for a 7.5% rate.
Lifetime hold for Michigan sportsbooks
“In broad terms, online sportsbooks hold a lower percentage of bets than retail sportsbooks,” said Eric Ramsey, a data analyst for PlayUSA. “The battle for customers in the most competitive markets additionally drives hold down when compared to monopolized markets, where the operator can get away with offering worse prices to bettors.”
Competitive Michigan market favorable to players
With 12 sports betting operators launched and three more on the way, Michigan is a competitive market.
If you decide to bet on a game, you can line-shop for the best price. That competition incentivizes operators to deliver quality prices to players. Good odds and prices can keeps players from considering opening accounts with other operators in the short term, thus hooking a long-term player.
When comparing this process to a market such as Oregon or Washington, D.C., jurisdictions that have had one legal online sports betting option run through the state lottery, the numbers bear out.
Through this week, Washington D.C. had reported a 15.7% lifetime hold percentage. In Oregon, the house has kept 8.9%.
On the other side of the spectrum, players had done best in Colorado (6.3%), Nevada (6.3%) and New Jersey (6.8%), the last of which is the nation’s leader in online sports betting. All of those are highly competitive markets.
According to Ramsey, online sportsbooks are nationally holding at 6.8%, while retail books are holding at 9.8%. Since most sports betting is done online, the overall average is much closer to the online number, as 7.2% of all sports wager amounts are held by sportsbooks.
As Michigan matures, and more bets are taken online — 92.5% of reported Michigan sports bets have been taken online since February, the first full month of online sports betting — that statewide 8.1% hold should move closer to the national average.
January cold, February hot for bettors
Until the spring, Michigan players took a winding road to settle on the current 8.1% lifetime hold.
In the first 10 days of Michigan online sports betting, the house did well, keeping 11.6% of bets.
In February, online sportsbooks held only 3.1%, and the Detroit retail sportsbooks actually reported their only lifetime loss in a month. They collectively lost the entire handle and paid out 0.3% of what was wagered.
The combined retail and online holds since then were 9.2% in March, 8.0% in April and 8.2% in May.
In February, retail operators told PlayMichigan that heavy betting on the Tampa Bay Buccaneers and Michigan’s Tom Brady in the Super Bowl was the biggest cause. In addition, wins (and covers) by Michigan and Michigan State in high-profile February college basketball games contributed.
As for January, heavy promotional spend at the outset could’ve attracted more recreational bettors, and more reckless bets, helping the books’ bottom line.
How would success for the local teams play a role?
Well, if wins by Michigan and Michigan State, along with a favored local athlete in Tom Brady, helped carry Michigan bettors, what about the other teams?
If the Detroit Pistons, Red Wings, Tigers and (most importantly) the Lions could ever get their acts together, could a homer-heavy betting populace take down the books for good?
Local teams winning could have some positive impact for bettors, Ramsey said. But the books will adjust to public sides (and heavy Michigan betting) if Detroit success shifts profitability in a meaningful way.
So, in the months ahead, there will still be occasional solid months for bettors. There will be others where the books prevails in even bigger ways.
The sportsbooks will always win in the long run.
But whether Michigan sports bettors can catch up to some other jurisdictions, and keep pace with the national average, will be a story we’ll keep an eye on come football season, the biggest betting time of year.