Michigan is one of only six states that offer legal online casinos. So, how is Michigan faring against the five others? PlayMichigan looked at the numbers.
Through October, Michigan online casinos have produced revenue of nearly $1.56 billion in 2023. That places the Great Lakes State in a virtual tie with New Jersey for second place. The complete revenue rankings through the first 10 months are:
- Pennsylvania – $1.71 billion
- New Jersey – $1.57 billion
- Michigan – $1.56 billion
- Connecticut – $327 million
- West Virginia – $127 million
- Delaware – $11.7 million
Michigan doesn’t rank as high when it comes to growth
In 2022, the revenue through October was New Jersey first ($1.37 billion), followed by Pennsylvania ($1.34 billion), Michigan ($1.28 billion), Connecticut ($227 million), West Virginia ($89 million) and Delaware ($11.4 million).
All six jurisdictions have increased online casino revenue year-over-year through the first 10 months. Though Michigan is up 22% in online casino revenue, that’s closer to the bottom of the pack by that measure against the other states. The rankings by percentage increase in online casino revenue are:
- Connecticut – 44%
- West Virginia – 42.3%
- Pennsylvania – 27%
- Michigan – 22%
- New Jersey – 15%
- Delaware – 2.7%
Pennsylvania spends significantly more on promos
Take out how much each of the top three states spends on promos and the revenue figures tighten. Revenue minus promos (also known as taxable revenue) drops Pennsylvania to second spot behind New Jersey and Michigan is just a little over $7 million behind PA in third.
That’s because Pennsylvania spends around double on promos than either Michigan or New Jersey. That means Pennsylvania spends more to acquire and retain customers.
So far in 2023, online casinos in Pennsylvania have spent over $290 million on promos, compared to $156 million in Michigan and $129 million in New Jersey.
That works out to 17% of Pennsylvania online revenue spent on promos compared with 10% in Michigan and 8% in New Jersey.
Taking out the promo money means the revenue after promos ranks as follows through the first 10 months of 2023:
- New Jersey – $1.55 billion
- Pennsylvania — $1.418 billion
- Michigan – $1.411 billion
- Connecticut – $262 million
- West Virginia – $127 million
- Delaware – 11.7 million.
Michigan a solid second in online casino tax revenue against other five
Michigan does particularly well when comparing tax revenue raised from online casinos. Though, that is mostly a function of the effective tax rate in each state.
The Great Lakes State is second through October with $394.5 million in total state and local taxes from online casinos. Michigan has an effective tax rate just over 25%.
Pennsylvania, with a tax rate over 35% leads with $608.5 million in taxes, followed by New Jersey at $274.5 million and a tax rate of 17.5%.
Online casinos are king, especially in Michigan
The revenue figures also clearly indicate online casinos drive the vast majority of the online gambling revenue in the six states. This is especially true in Michigan.
Through the first 10 months of 2023, adding online casino revenue to sports betting revenue, we find that 82.5% of the revenue in Michigan comes from online casinos.
By percentage of revenue derived from online casinos, the ranking is as follows:
- Michigan – 82%
- West Virginia – 78%
- Pennsylvania – 76%
- Connecticut – 69%
- New Jersey – 66%
- Delaware – 59%
