Sports betting picked up a lot of the headlines and publicity prior to the launch of online gambling last month in Michigan.
But as known by industry observers, and confirmed by Wednesday’s revenue release by the Michigan Gaming Control Board, internet gaming should be the real moneymaker in Michigan.
While sports betting operators raised $13.3 million of revenue in the first 10 days after the Jan. 22 statewide launch, online casinos earned more than twice that.
Online poker is folded into the internet gaming revenue numbers for now. Though with only one operator live with poker (which reported less than $2 million of total online gambling revenue), the online casinos proved early how strong they can be.
1. It’s not just revenue, but state taxes, too
Michigan brought in $4.3 million in taxes from casinos and poker sites and just over $110,000 from online sports betting. This is in large part due to the difference in tax rates for each online medium. Sportsbooks are taxed at 8.4%, whereas online gambling sites are taxed on a graduating scale between 20% and 28%.
However, that gap should shrink some in time, and fluctuate. Sports betting operators were able to use their plethora of sign-up bonuses to shield revenue for now. As the market settles, less and less of those will likely be offered as more and more eligible Michiganders sign up to play.
2. MGM (and marketing) matters in Michigan
Speaking of industry leaders, how about the familiar names at the top of the revenue list?
We suspected BetMGM Casino might be positioned better in Michigan than it was in other states due to name recognition. And we were right, as the brand leads the way with close to 40% market share.
The fact that BetMGM kicked off its online gambling life in Michigan with some app issues apparently did not hinder its customer acquisition too much in those first 10 days. A lot of that may have to do with the heavy marketing push the site did in the lead-up to launch.
MGM Grand Detroit casino is the busiest of downtown Detroit’s halls. And BetMGM had a long runway for Jamie Foxx ads to reach… well, everyone … during fall football season and the winter months when Michigan TV viewers are stuck inside.
The BetMGM pitchman can be found everywhere, including mural ads on buildings in downtown Detroit. The message apparently stuck… but for how long?
Cross-selling, Golden Nugget, and what’s next
Right behind BetMGM sits two well-known online gambling brands and big-time industry leaders: FanDuel and DraftKings. It is clear their dual online casinos benefited from cross-selling between the sportsbook and casino games.
Take Golden Nugget Michigan for instance. The brand is among the online casino leaders in New Jersey, but underwhelmed in January here, raising less than $500,000 in revenue and ranking seventh of nine operators with a 1.7% market share.
Golden Nugget Online Gaming (GNOG) announced it had taken in $2 million in casino wagers in its first 10 days. However, Golden Nugget had a slow revenue start in the Garden State, too, and didn’t launch right at the starting line there.
Advertisements have started to pop up here for the brand, and perhaps the slowdown of sports this summer could bring fewer sports betting ads and a focus on online slots and casino games. That could benefit more casino-focused brands such as GN.
3. Things are likely to change in Michigan online gambling
More than sports betting, where leaders staked ground early and could stay steady, the casino market should grow and evolve.
It would be hard to be a Michigan sports fan and not know about the online sports betting launch. That might be less true for casino players. More customers will be added over time, and along with that, more games.
Online game libraries were packed with options at launch, but one key element missing from the mix was live dealer. Live dealer games will have a huge impact on the market. In New Jersey, the addition of live casino to Golden Nugget’s library in 2016 changed its fortunes considerably. It was several years before other brands in that state caught on to live dealer popularity and jumped on board.