More than $8.1 million in taxes collected from regulated gambling in 2021 will benefit the Michigan horse racing industry.
Online sports betting, online casino gaming, Internet wagering and simulcast wagering on horse races all contributed to the massive haul for the Michigan Agriculture Equine Industry Development Fund.
Thanks to the increase in tax revenue from the first year of regulated online sports betting and casinos, the fund reached $8.2 million in 2021. It was at $2.3 million in 2019 and $2 million in 2020.
What is AEIDF?
The Michigan Agriculture Equine Industry Development Fund promotes horse racing and other equine competitions in the state, while also supporting breeding of horses and research beneficial to the industry.
“The AEIDF promotes economic development by providing funding in Michigan’s rural areas,” Michigan Gaming Control Board Executive Director Henry Williams said in a release. “And the proposed fiscal year 2023 budget includes continued opportunities to invest in our rural communities.”
Where did the money come from?
Online sports betting and casinos became legal in Michigan on Jan. 22, 2021, and their first year provided a boon of tax revenue for the state.
More than $1.1 billion in revenue was generated by online casino gaming in Year 1, leading to more than $279 million in tax dollars. Of that, $4.5 million will go to the AEIDF.
Online sports betting generated more than $337 million in revenue and $15.1 million in taxes, $412,498 of which will go to the AEIDF.
The AEIDF receives 5% of taxes collected from Detroit casinos‘ online sports betting and online casino gaming each year. The funding is capped at $3 million per fiscal year from each tax source. Tribal operators‘ payments on these forms of gaming do not go into the fund.
Simulcast wagering at Michigan horse tracks produced $1.8 million in tax revenue, and online wagering on simulcast horse races produced $1.3 million in tax revenue.
Three third-party facilitators of online wagering on simulcast horse racing are licensed in Michigan: TVG Network (owned by FanDuel Group), Churchill Downs TIC (TwinSpires brand) and XpressBet. NYRABets LLC, had a conditional license in 2021. Michigan sportsbooks cannot offer pari-mutuel wagers on horse racing.
Horse racing tax revenue up in 2021
Northville Downs being back open throughout 2021 paid off for the state. The state’s lone horserace track ran 53 live races and offered simulcasting throughout the year. Live racing will start up again on March 11.
In 2020, the track was closed twice because of COVID-19: March 18 through Aug. 14, and Nov. 18 through Dec. 21.
The state received $954,540 in taxes on simulcasting in 2020, and $839,124 from third-party facilitator wagering.