| The Detroit News
The state of Michigan is poised to launch online gaming and sports betting this week — just in time for Super Bowl LV.
The long-awaited launch is fueling excitement among eager operators and fans, and opening up a potentially lucrative new revenue stream for casinos grappling with the effects of coronavirus-related restrictions.
“I’ve been waiting for years for online sports betting to arrive in Michigan,” said Mike Solano of Trenton. “With online sports betting, there’s no need to spend extra money in places like Vegas or New Jersey when much of the allure those places bring, can now be reached from your own couch.”
The Michigan Gaming Control Board says it expects to authorize the launch of online gaming and internet sports betting by Tuesday. Leading up to that date, the agency has been working to approve the applications of operators that are looking to get in on the action.
“The MGCB will authorize a first wave of applicants whose complete submissions have been reviewed and confirmed,” the agency said in a statement. Another round of application approvals will follow the initial phase. Some operators will immediately have authorization for both types of gaming, while others may get approved for only one, the agency said.
The gaming board expects there to be “about a week between launch authorization and launch for the first group. This will give the platform providers additional time for testing and adjustments before the gaming goes live.”
Under the new law, signed by Gov. Gretchen Whitmer at the end of 2019, only Michigan’s licensed casinos (which include 24 tribal casinos and the MGM Grand, Greektown and MotorCity casinos in Detroit) can offer the two forms of gambling. Platform providers such as FanDuel and DraftKings can partner with casinos.
The opening could be a lifeline for casinos that have seen their revenues drop precipitously during the coronavirus pandemic, as they’ve navigated shutdown orders and capacity restrictions. The new revenue will aid Detroit, too, which relies heavily on casino taxes.
The casinos pay an 8.4% tax on adjusted gross sports betting receipts. The state receives 3.78%, and the city receives 4.62%. In 2020, retail sports betting at Detroit’s casinos brought in just under $845,000 for the city and more than $690,000 for the state, according to the gaming control board.
In all, the three facilities reported nearly $639 million in aggregate revenue during 2020, down 57% from a record of nearly $1.5 billion in 2019, the gaming board reported. Detroit casinos paid $73.8 million in wagering taxes and development agreement payments to the city in 2020, down sharply from the $184.2 million paid in 2019, adding to the city’s pandemic-related budget woes.
The opening of new gambling opportunities is sure to help offset losses, as millions in new annual revenues are expected to pour in. The online gambling market was valued at $53.7 billion in 2019 and is expected to grow to more than $127 billion by 2027, according to a forecast by business consulting firm Grand Review Research.
“Increasing adoption of smartphones and easy access to casino gaming platforms are currently driving the market,” the firm reported. “Factors such as increasing internet penetration and availability of cost-effective mobile applications for betting are also expected to contribute to market growth over the forecast period.”
The gaming board allowed Detroit casinos to open on-site sports betting in March. Some tribal casinos have since opened on-site sports betting, as well.
The Detroit casinos opened their in-person sportsbooks just days before the pandemic led to widespread game cancellations and before public health orders from the state forced casinos to close their doors for months and then reopen under strict capacity limits.
“We are thrilled to build on this collaboration with FanDuel by launching a fully integrated, real money gaming online experience for residents and visitors of the state of Michigan,” said Bruce Dall, MotorCity Casino Hotel president, in a statement. “Subject to final regulatory approval, MotorCity Casino expects FanDuel Sportsbook and Casino apps to soon be available on iOS and Android.”
A spokesman for Greektown said the casino would have more details to share soon, but in the meantime is “excited to launch.”
BETMGM, a joint venture that is managing MGM’s online gaming and betting, said in a statement: “We are eagerly awaiting the approval of the regulations and look forward to working with the Michigan Gaming Control Board to support our launch shortly thereafter.”
Both FanDuel and DraftKings last year inked sponsorship deals with the Detroit Pistons, signing on as official sports betting partners of the NBA franchise.
Wagering platform TwinSpires is fueling excitement for its plans to open an online sports book in Michigan with a new ad campaign starring former NFL quarterback Brett Favre. Fox Bet is also among the platform providers preparing to launch.
DraftKings, which has been advertising and offering promotions on its platform to draw in new users ahead of the launch, sees Michigan as a promising market, for both sports betting and iGaming products, such as blackjack.
“There’s tremendous pro sports energy,” said co-founder and North America president Matt Kalish. “But also the college sports environment is so strong, with the Wolverines, Michigan State, and lots of really popular college teams. College basketball and football are two of the five biggest sports in sports betting. I think it’ll be a really strong state.”
DraftKings expects to be one of the first platforms to launch in the state: “We’re ready to go,” said Kalish. “We can be live as soon as we hear the go-ahead from the gaming control board, so we’re eagerly anticipating that moment.”
FanDuel, too, says it’s eager to ready to hit the ground running with its sports betting and iGaming offerings.
“We see (Michigan) as one of, if not the most, potential-filled marketplaces in the country that have legalized online sports betting to date, so we are certainly very enthusiastic,” Chief Marketing Officer Mike Raffensperger said.
The company, which is offering promotions to customers who download its sportsbook app ahead of the launch, reports its retail sports betting location at MotorCity is already its second-most popular location in the country out of about 10 total.
Fan excitement builds
MGCB spent much of 2020 working its way through the rule-making process for online casino betting, sports betting and fantasy sports. In December, the board approved provisional licenses for 15 online sports betting and online casino operators.
Ahead of the launch, sports fans in Michigan expressed eagerness to start placing bets, and some impatience with how long it’s taken the state to complete the process. Fans said they’re excited about the convenience of being able to make wagers from their phones, and for activities that keep them dialed into sports even when their hopes for Detroit’s sports teams’ prospects are dashed.
“Since all of the Detroit sports teams are in rough shape, to say the least, my friends and I follow other teams and other things going on,” said Chris Peuterbaugh of Washington Township. “We’ll be betting on them just as something to follow and stay involved in sports. It just makes it more interesting, more exciting.”
Some fans said they or their friends frequently gamble in places such as Indiana and Las Vegas. They pointed out that this will be an opportunity to redirect to Michigan dollars that are being spent in other states.
Nicholas Dettore of downtown Detroit said he has been placing bets in person at MotorCity and MGM but plans to switch to online betting as soon as it opens. The activity acts as “a nice side source of income,” he said.
Abdul Memon, 27, of Grand Rapids said it makes watching games more exciting when there’s money on the line.
“I’m already a sports fan and have a lot of knowledge about the game, and why not profit off knowing what you know?” said Memon, who has a Twitter account dedicated to sports content and plans to use DraftKings and FanDuel.
Meanwhile, some Michigan residents are concerned about the launch exacerbating existing inequities and addiction issues.
“I am the opposite of excited about yet another way to gamble that will ultimately and disproportionately affect lower-wage earners, retirees and those with gambling issues,” said Tamara Mathis of Southfield, a bankruptcy specialist who said she has seen firsthand the effects of gambling problems.
Mathis noted the toll the pandemic has taken on low-wage workers in communities, such as Detroit, which is majority-Black and one of the poorest large cities in the country. She raised concerns about equity issues, from the ways gambling affects lower-income communities to who sees the benefit of casino revenues.
“With the pandemic, people already have a loss of income,” she said. “We’re in a recession already, so there’s going to be foreclosures and more businesses closing in the next year. … Statistics already show that people that are lower-wage retired, or at or below the poverty level do tend to have more issues with gambling.”
Assistance for gambling problems are available through the Michigan Problem Gambling Helpline at (800) 270-7117. You must be at least 21 years old to participate in online gambling or sports betting.