Sports betting in Michigan appears to have hit a plateau as it nears the end of its second year.
Year-over-year handle has leveled off in recent months, and PlayMichigan projects that to continue into 2023, even leading to a small decrease in Year 3.
Michigan sports betting 2023 projections
The PlayMichigan projection for Michigan sports betting handle in 2023 is just above $4.6 billion. There are still two months to add to the 2022 total, but it’s on pace to finish a little below $4.8 billion.
That’s a drop of about 3% in sports bets being placed in Michigan, and revenue brought in by operators likely would see a similar drop, a difference of about $10 million.
Most of that projected drop in handle and revenue will happen in the first half of 2023. January 2022 is the record sports betting month for the state at $532.7 million in handle. The PlayMichigan estimation for January 2023 is around $480 million.
Each month through July 2023 is projected to be lower than its 2022 counterpart, but August through December is projected to be higher. It should be noted that November and December 2022 are also projections.
What factors are leading to a drop in Michigan sports betting?
While these are dips, Michigan essentially is experiencing a sports betting market that has plateaued.
This isn’t just a projection – it’s something that has played out this fall. The overall handle for September 2022 was below 2021. While the dip was minimal – about 1% – it marked the first year-over-year drop in the state.
October 2022 was higher than 2021, but even that was only an increase of about 1.4%.
It could be a blip, as discretionary spending is down with inflation still hitting pocketbooks, not just in Michigan, but around the country. There are other factors at play, however, that point to it being less about economic pressures.
Michigan’s per capita handle is on pace to be $476 in 2022, much lower than other comparable markets. Pennsylvania ($554) is also an outlier in that metric but well ahead of the Mitten State. Nearby Illinois, for instance, is on pace to come in at $767.
Michiganders don’t bet enough per person, at least at this point, to have the market show significant growth in its third year.
Number of online sportsbook skins maxed out
The state also has a cap of 15 online sportsbook skins. While SI Sportsbook came on board in September, and Eagle Casino & Sports launched in April, the lure of a new online sportsbook isn’t there for Michigan bettors.
There were 10 live sportsbooks at launch, and 14 have been available since mid-2021. The biggest names in sports betting – FanDuel, DraftKings, BetMGM and Caesars – all went live in January 2021 in Michigan.
While this made for a very successful launch, it leaves fewer chances for customers to open new accounts and take advantage of new welcome bonuses in Year 3.
How does Michigan sports betting compare to other states?
The plateau isn’t Michigan specific, though.
October saw sports betting markets around the country in a similar year-over-year position to Michigan. The number of states that saw an increase from October 2021 nearly matches the number that saw a decrease.
Pennsylvania was up, but only 3%. Indiana was down 3%.
New Jersey was down 19% from October 2021, but the newer legal market in New York could account for nearly all of that.
Illinois is a bit of an outlier, though, as it was up 23% in October, topping $1 billion for the month. It’s on a slightly different timeline than Michigan. While both launched legal sports betting in March 2020, Illinois allowed online sports betting in June 2020.
But in general, Michigan sports betting leveling off heading into Year 3 is not terribly unique.
