A former state representative put a wager on Michigan State to win the NCAA Tournament in March 2020 at the opening of one of Detroit’s sportsbooks.
A state senator in January did the same from the comfort of his couch when online sports betting arrived.
The different bets are emblematic of the changing world that surrounds the one-year anniversary of Michigan sports betting.
The 1 p.m. bet by Brandt Iden on March 11 at MGM Grand Detroit was voided last year, essentially a do-over, which is what the industry is hoping for in year two.
The second bet, made by Sen. Curtis Hertel Jr., represents the hope that life will return to normal for the rest of 2021.
By no means was 2020 the best of years for sports or sports betting in the Great Lakes State. Casino closures scarred the gambling industry while canceled sporting events prevented any true measure of the industry’s success.
But high hopes pushed Michigan to fulfill its ultimate goal of an online market that should see plenty of growth in the years to come.
Opening day of sports betting held so much promise
Let’s go back to Day One of legal betting in Michigan. There was lots of excitement on March 11, 2020, as former athletes, casino executives, and state politicians gathered for a series of sportsbook grand openings in downtown Detroit.
But looming over all of the celebrations was the coronavirus pandemic, which had already made hand sanitizer a staple and everyday handshake moments an awkward adventure.
Hours after MGM Grand and Greektown Casino opened their sportsbooks on March 11, Utah Jazz center Rudy Gobert tested positive for COVID-19 moments before tip-off against Oklahoma City later that night.
On March 12, college basketball games were coming off the board as cancellations marred the Barry Sanders ceremonial opening appearance at MotorCity Casino.
Soon, sports shut down entirely, the casinos closed for months, and an expected new revenue stream was shut off before it could start.
“Twenty-four hours later, the world just ended, it felt like,” Iden told PlayMichigan on Wednesday. “To go from that feeling, from ‘Boom we finally got this done,’ to zero, it was an absolute gut punch. But now we look back and say, ‘Look at how far we’ve come.’”
Tribes opened up sportsbooks throughout the year
Michigan’s 12 federally recognized Native American tribes were expected to open sportsbooks soon after Detroit’s casinos.
But the pandemic domino effect ruined plans for spring grand openings at any of the locations. The 23 tribal casinos all closed for at least several weeks.
But with sports slowly returning in the summer, retail sportsbooks began to open. FireKeepers Casino in Battle Creek was first to take bets on June 22. There was a light at the end of the tunnel.
The race was on for online gambling
Meanwhile, the Michigan Gaming Control Board staff went into overdrive to write the rules and regulations for online gambling.
After Gov. Gretchen Whitmer passed expanded gambling legislation in December 2019, the estimate was online sports betting and internet gaming would launch early in 2021.
They were ultimately right, though there were times throughout 2020 that it appeared an earlier start could materialize. It wasn’t meant to be. The challenges of remote working, political squabbles, and pandemic priorities turned government officials’ attention to other areas.
“Nearly all of the agency’s operating units were involved in the internet gaming and sports betting rollout,” said MGCB Executive Director Richard Kalm recently to MichiganGaming.com. “The (online gambling launch) committee met at least weekly for months in advance and convened more frequently as needed before the Jan. 22 launch.”
In all, the MGCB’s committee had to license 15 sports betting operators and 59 internet gaming or sports betting suppliers.
There were once projections of a November launch, but ultimately, online sports betting missed the entire Detroit Lions season. When online gambling finally did launch, it did so in a big way.
MI online sports betting booming so far
Ten sports betting operators were at the starting line for the Jan. 22 launch.
In the first 10 days, $115.2 million was wagered statewide in online sports betting, one of the biggest launches in the country. Sign-up promos were flying around. TV commercials were everywhere.
Super Bowl LV is expected to lead to more big numbers in February with a full month’s worth of online betting to account for.
More to the point, the launch of online gambling coincided with a somewhat normal sports year. Plans were in motion to create event bubbles for the NCAA Tournament so college basketball fans wouldn’t be at a loss for a second straight year. In turn, Michigan college teams were riding high.
Michigan will be one of the top seeds. Michigan State should make the field, and Izzo’s teams are always dangerous in the NCAA Tournament. That should spur a strong March handle, as well.
By next football season, 15 operators should jostle for market share, as three more operators are yet to launch. Two of those are among the three tribes that plan to launch online sports betting and casino products with branding from their own casinos.
Michigan could reach enormous heights for sports betting. The state could approach national leaders like New Jersey, which has taken nearly $1 billion in monthly wagers recently.
Tax revenue much-needed for firefighters’ fund, education
Hertel, an East Lansing Democrat, focused on ensuring funding for a good cause in the late stages of the 2019 legislative struggle.
The legislation ensures online gambling will kick in $4 million annually to the first responder presumed coverage fund, which compensates firefighters with certain cancers for their coverage.
“That was one of the most important things I was able to get in the legislation was that permanent fund source,” Hertel said. “Of all the things that were part of the legislation, that was what I was most proud of.”
Millions also will be kicked into the school aid fund, depending on how much tax revenue is raised. These are important holes to fill in a state budget that will be recovering long after the pandemic.
Iden estimated that $100 million in tax revenue could be generated annually here from online sports betting and casinos.
Horse racing among next priorities in Lansing
Moving forward, Hertel said some of his legislative focus is on the struggling horse racing industry.
While the 2019 laws added advance deposit wagering (ADW) for online horse racing bets statewide, more might be on the way.
Historical horse racing contests, which are a lot like slot machines, could be on the horizon. That would benefit the state’s only live track, Northville Downs, and others that could open or reopen in the future.
“There was a resurgence in horse racing during the pandemic, and I have hopes that will continue,” Hertel said.
Downsides of gambling linger, need to be addressed
In addition to first responders and education, online gambling will kick in $1 million annually to the state’s compulsive gambling prevention fund.
But with more access to gambling on sports from your phone, more problem gambling situations will arise throughout the state.
With advertising during sporting events reaching a critical mass, it’ll be important to continue to fund programs, create awareness, and possibly even think bigger about effective solutions. The arrival of online sportsbooks makes things easy and efficient for sports bettors, but also can lead to irresponsible actions over the long term.
“One of the strongest tells of problem gambling is proximity,” said Michael Burke, president of the Michigan Association on Problem Gambling. “[Online betting has] opened up a whole new area of gambling. Of course, with an increase of gambling comes an increase of problem gambling.”
Slow start for tribal sports betting revenue
The tribes are only just starting to see the benefits of tax revenue from sports betting.
It was a slow start, said David Arroyo, tribal chairman of the Grand Traverse Band of Ottawa and Chippewa Indians. Only about two months of sports betting have truly registered for the tribe because of sports cancelations and casino closures, he said.
The tribe partnered with William Hill for its retail sportsbooks at Turtle Creek and Leelanau Sands casinos near Traverse City. Sports betting opened there in September. William Hill online sportsbook is now up and running statewide.
“The addition of sports betting added a burst of renewed excitement for our staff, our guests, and the state, which was greatly welcome in the midst of a pandemic,” Arroyo said.
“The COVID-19 crisis has impacted all of our lives and businesses, but as a tribe we have remained positive throughout it by providing full compensation for all our employees throughout the lockdown, along with their portion of health insurance to ensure their health and safety; donations to area food pantries, schools, and hospitals; and continuing with our area sponsorships to get our community back on track for the future.”
Kalm noted to MichiganGaming.com that the ability to work with the tribes ensured a smooth launch.
“Michigan created a model for the US gaming industry by establishing a path for the tribes to obtain licenses for statewide internet gaming and sports betting. The agency established a good working relationship with the tribes through its Indian gaming oversight function, which strengthened as we began to work with them in a regulatory capacity. We also worked closely with the tribes during the rulemaking process. Their feedback was key to ensuring an efficient, successful launch.”
But no one expected to launch a new industry in the midst of a pandemic.
Michigan should be a model for other states
Iden was the driver for sports betting legislation until it finally reached the finish line in 2019.
The southwest Michigan Republican was term-limited in the House. He is now head of US government affairs for Sportradar, a sports data firm on the industry’s supplier side. He works with state legislators across the country in pushing for open markets in their sports betting plans, he said.
Iden said getting Michigan tribes and commercial casinos on the same page and in the same online system is a model for other states.
“In Minnesota, I’m having conversations where, ‘How does the tribe in Fond du Lac capture revenue from Minneapolis-St. Paul?'” Iden said. “They want to be able to do the same thing.
“We’re sharing the success of Michigan with our tribal partners there and saying, if it can work in Michigan, it can work in Florida, California, huge markets that could be in play.”
Sports betting finding its place in MI sports culture
With his new role, Iden can’t make sports wagers anymore, but he said he has played at some MI online casinos.
Hertel said he fields thankful messages from friends when they win sports bets. He’s grateful they haven’t blamed him when they lose. Yet.
It’s part of the new new normal. After a wild 2020, it’s a welcomed change.
And for industries like Michigan sports betting, that means finding out what the new normal looks like.
“We freed up dollars that were not available,” Iden said. “You’re going to see those numbers continue to grow. And I think it’s going to be bigger than anyone had ever imagined.”
