The events of March 11 and 12 are ones that as a nation we won’t soon forget. Pandemic news brought a slow acceptance of the new normal on the horizon. All the while, Michigan’s sports betting industry was opening, right as the world was shutting down around it.
Detroit’s casinos took their first legal sports bets over those two days in March, hours before the sports world shut down.
And while sports betting continued to grow and rally at times throughout the year, the pandemic’s missed opportunities and 2020 stops and starts cloud the picture of just how big the industry could become.
“It’s gone on a long time,” said Jake Miklojcik, gaming analyst for Michigan Consultants, about the pandemic.
“It’s depressing (casino revenues), for sure. The problem with COVID and closures is it’s very hard to separate all the numbers out. It’s just very hard.”
Mobile sports betting should launch in January, which will be a boost. But until then, the first year of sports betting in Michigan was hit and miss. Is there a silver lining? Perhaps.
More than $120 million bet on sports in 2020
First, there were nearly five months of closed doors from March to August for Greektown Casino, MGM Grand Detroit, and MotorCity Casino.
Then, the industry endured more than another month of shuttered casinos right as sports betting was picking up in November.
Gov. Gretchen Whitmer signed expanded gambling laws in December 2019, paving the way for sports betting to be fast-tracked by the Michigan Gaming Control Board for March’s NCAA Tournament college basketball extravaganza.
All told, Detroit’s casinos will have been open for less than four months in 2020 since sports wagering became legal. Tribal casinos also opened up sportsbooks across the state, but many of them have been closed throughout 2020, too. When they are open, they are not subject to public reporting of numbers to the MGCB.
In downtown Detroit, heading into another few days of betting in the final week of the year, $121 million was bet on sports in 2020.
Of that, more than $1.3 million was tax money collected by the state of Michigan and the city of Detroit.
|Casino||Handle||Revenue||State tax (3.78%)||City of Detroit tax (4.62%)|
|MGM Grand Detroit||$68,722,968.50||$9,029,186.40||$341,303.25||$417,148.42|
Pandemic makes projections hard to calculate
It’s hard to extrapolate what that amount means when compared to what was expected. For one, nobody expected Michigan sports betting to be shut down for nearly five months five days after it launched. Secondly, there were no sports to bet on.
When Whitmer signed the gambling bills last year, the governor’s office touted $19 million in new revenue for Michigan.
The first year, even including the first couple months of 2021, will fall well short of that, despite more than $1 million in revenue also brought in so far from fantasy sports contests.
However, and this is important, the projections also included the online market, which is expected to far outpace retail sports betting. Judging by other markets such as New Jersey and Pennsylvania, Michigan should expect 80% of total bets to be online.
It’s difficult to take anything from the numbers of a really messed up 2020, though there’s a glimmer of success.
The silver lining of Michigan sports betting
Detroit casinos took more than $15.7 million in bets in August, despite being closed the first week.
The rise continued for the full months of September and October, when more than $33.5 million and $46.1 million of sports bets were handled, respectively.
November was right about on pace before a Nov. 17 closure, taking nearly $25.1 million in bets.
Casinos also faced a 15% capacity restriction while sports betting was live in the state, except for those first five days. It makes those numbers even more impressive.
Miklojcik said folks may have stayed home because of COVID-19, but not necessarily because of the restrictions.
“You’re never really at 100%,” Miklojcik said. “The vast majority of days, you’re going to be able to accommodate your old numbers.”
Factor in a robust online gambling market and the numbers touted by Whitmer and Lansing are definitely possible in the future.
Michigan ‘pretty excited’ about legal betting
The other factor is tribal gaming. Because of the lack of public numbers, it’s hard to know exactly how much sports betting moved the needle for tribal casinos. In turn, Michigan sports betting totals may be more than meets the eye.
FireKeepers Casino in Battle Creek opened its sportsbook in June. Now, 16 of Michigan’s 23 tribal casinos have opened sportsbooks on-site.
In Michigan, the numbers are all anecdotal for now for multiple reasons, the least of which is the fact that tribes operate separately from the state. However, online sports betting through the tribal casinos will be reported publicly. And in the end, the tribes likely enjoyed the addition of sportsbooks, said Miklojcik.
“I think they were generally pleased, but I don’t think anyone fully knew (what to expect). I think it was catching on, but remember there was nothing to bet on for a while, very little. But once sports were playing, I think people were pretty excited.”
To be fair, 2020 was perhaps not the best year to start a new legal gambling industry. But when 2021 rolls around and online betting kicks off, it’ll be a different world entirely.