Residents of Michigan may be noticing an increase in sports betting advertisements from companies such as FanDuel, DraftKings, and other top sports betting platforms. Offers such as free sign up bonuses mark the introduction of legal sports gambling to the state.
A year ago, Governor Gretchen Whitmer signed legislation to legalize sports gambling and online betting in Michigan. Under the new legislation, sportsbooks have had to seek individual partnerships with brick-and-mortar casinos across the state. This may account for the long wait residents have had to endure before they can place their first legal sports bets in the state. Last month, the Joint Committee on Administrative Rules waived the 15-day review requirement for approval of the final rules regulating online gaming. It is now up to the platforms themselves to obtain official licensing and launch to bring online sports betting to Michigan. Residents will have to continue to wait for an official launch date from the Michigan Gaming Control Board. According to Executive Director Richard Kalm, the official launch date will depend on how quickly the major platforms can come under the state’s regulatory requirements. “The platform providers’ ability to meet the requirements of the laws and rules will determine which entities can be licensed for launch first,” he said.
Residents of the state can expect a similar sports betting experience to other states in the U.S. that have legalized the practice. Residents will need to be over the age of 21 to place a legal sports bet. Platforms will also utilize geolocation technology and identity verification to ensure that bettors are in compliance with state law. Once the platforms are licensed, they will offer wagers on all professional and college sporting events from soccer to baseball and basketball. The sports betting legislation provides for dedicated revenue from the practice to the state’s School Aid Fund and the First Responder Presumed Coverage Fund. An 8.4% tax will be placed on winnings from retail sports bets and a range from 20% to 28% on all online sports wagers.
A Potential Revenue Builder
Initial projections show a huge revenue boost for the state which has been hit hard by the Covid-19 health restrictions and related shutdowns. The three commercial casinos in the state are currently closed in accordance with health guidelines. The tribal casinos in Michigan are not required to adhere to those same health guidelines however, two have voluntarily closed down. The three commercial casinos, MGM, MotorCity, and Greektown, were operating under reduced capacity prior to the most recent closures. As of the year end, the revenues for all three were down roughly 54% from the same period last year.
In states where sports gambling is already legal, the data reflects that patrons are utilizing the freedom to place their bets online, in the face of casino closures. In states such as New Jersey and Pennsylvania sports gambling has made up 43% and 28% respectively of all gambling revenue. Industry experts expect that Michigan could experience a similar boost once it gets its own sports betting industry up and running.