ichigan sports betting, online casinos and poker could earn a total revenue of $650 million in year one of operations, resulting in $93.6 million in first-year tax revenue for the state, according to projections from MichiganSharp.com.
The first of Michigan’s online sports betting and casino platforms might launch by the end of 2020, with competitive state tax rates. Gross revenue from sports betting, both online and retail, will be taxed at 8.4% from the state. Detroit’s three commercial casinos pay an additional 1.25% city tax.
Michigan hosts 26 land-based casinos (23 of them are tribal properties), all of which can apply for sports betting and internet gaming licenses through the Michigan Gaming Control Board and offer those verticals to the state’s 10-million population. “All of the pieces are in place for Michigan to become a major hub for sports betting and online gambling,” Geoff Fisk, analyst for MichiganSharp.com, said in a news release. “Virtually all of the state’s casinos should want a piece of the new market, especially with the attractive tax rates.”
By comparison, New Jersey taxes land-based sports betting at 9.75% and online sportsbooks at 13%. Indiana’s online sports betting tax is levied at 9.5%, while Pennsylvania taxes sports betting at 36%. In both states, online wagering accounts for more than 80 percent of total sports betting revenue.
State lawmakers passed House Bill 4916 in December 2019, which legalized both retail and online sports betting. The bill also brings online casinos and online poker to the state, setting the stage for Michigan to become one of the biggest legal online gambling markets in the US.
MichiganSharp.com projects that the state could bring in as much as $400 million in total first-year sports betting revenue, producing $33.6 million in tax revenue for the state. “Mobile wagering should be the major revenue driver for Michigan’s sports betting market,” Fisk said. “The convenience and ease of access of online sports betting opens up a whole new world of opportunities for both bettors and sportsbook operators.”
Online casino and poker revenue will be taxed at 20-28% from the state, using a tier system dependent on earnings. The analyst firm projects that online casinos and poker could earn as much as $250 million in first-year operations, bringing in a possible $60 million in tax revenue. It is projected that total revenue from sports betting, online casinos, and online poker, could earn $650 million in year one of operations, resulting in $93.6 million in tax revenue for the state.