Michigan Sets Record for iGaming Revenue in October

Michigan’s iGaming sector reached a new milestone in October, with total online gaming revenue hitting a record $220.7 million (£174.1 million/€209.0 million). This marks a significant achievement for the state, as it demonstrates the continued growth and popularity of online casino games and other digital gaming platforms. However, despite this success, Michigan’s sports betting market faced a notable decline, with online sports betting receipts falling by 26.7% compared to the same month last year. The state’s overall gaming revenue highlights the mixed results that can come with such an expansive market, with iGaming flourishing while sports betting experienced a slowdown.

 

Growth in iGaming, Dip in Sports Betting

Gross receipts from internet gaming and sports betting in Michigan totaled $253.7 million for October, surpassing the $205.3 million reported in October 2023 by 23.6%. However, despite the year-over-year growth, this figure was 2.8% lower than September’s total of $261.0 million, showing that month-over-month trends can be more volatile in this market. Adjusted gross receipts, which account for promotional spending and other discounts, reached $208.5 million, an increase of 24.3% from October of last year. However, this was slightly below September’s total of $209.6 million by 0.7%, indicating that the market may be facing a small degree of seasonal fluctuation.

A standout achievement in October was the record-breaking performance of Michigan’s iGaming sector. Revenue from internet gaming soared to $220.7 million, surpassing the previous high of $215.5 million set in March by 2.4%. This represented a 37.7% year-over-year increase and an 8.9% rise compared to September, reinforcing the idea that Michigan’s iGaming market is thriving. The surge can likely be attributed to increased consumer engagement, a growing number of online platforms, and the expansion of online casino games and other digital offerings in the state. FanDuel and MotorCity Casino led the iGaming market with $56.17 million in gross receipts, narrowly edging out BetMGM and MGM Grand Detroit, which reported $56.16 million. DraftKings and the Bay Mills Indian Community rounded out the top three with $40.0 million, solidifying their positions as significant players in the state’s iGaming landscape.

While iGaming thrived, Michigan’s online sports betting market faced a challenging month. Gross sports betting receipts dropped to $33.0 million, down 26.7% from the previous year and a substantial 43.5% from September. Adjusted gross receipts for sports betting amounted to $9.9 million, representing a steep decline of 58.0% year-over-year and 64.3% from the previous month. This drop has been attributed to less favorable NFL results during the month of October, which led to fewer bets and a reduced volume of wagers. With NFL games often driving a large portion of the sports betting handle, poor performance by teams and unexpected outcomes likely contributed to the sharp decline in receipts.

Despite this, the total handle for sports betting — the amount wagered — reached $560.4 million, an increase of 5.1% from October 2023 and 11.7% from September. However, this increase in handle was insufficient to offset the decline in receipts, showcasing how the efficiency of sportsbooks in turning bets into revenue can be impacted by unfavorable outcomes. The overall hold rate based on gross receipts stood at 5.89%, while the adjusted hold rate for sports betting was a much lower 1.77%. This sharp difference reflects the higher promotional spending involved in the sports betting sector, as well as the volatility of results that can significantly alter the revenue generated from these wagers.

FanDuel and MotorCity Casino continued their dominance in the sports betting market, generating $17.0 million in gross receipts from $211.3 million in wagers, yielding a strong hold rate of 8.05%. DraftKings and the Bay Mills Indian Community placed second with $6.5 million in receipts from $159.9 million in wagers, while BetMGM and MGM Grand Detroit came in third with $4.6 million in receipts from $84.3 million. These operators’ positions reflect their ability to maintain solid user bases, but the significant decline in receipts shows that even the top operators in the state are not immune to the volatility of the sports betting market.

 

Retail Sports Betting Shows Loss in Detroit

The MGCB also released figures for Detroit’s three land-based commercial casinos, which saw an overall increase in revenue. Combined revenue from the three casinos reached $102.9 million, up 24.3% from October 2023 and 0.9% higher than September. Slot and table game revenue accounted for $103.7 million, marking a 26.9% year-over-year increase. This growth signals that the land-based gaming market in Detroit remains resilient, buoyed by steady demand for traditional casino games. However, the overall market was negatively impacted by a loss in retail sports betting, which saw a decline of $826,796. While the revenue from slots and tables games increased significantly, the downturn in retail sports betting was a setback for the Detroit casinos.

MGM led the land-based market with a 48% share of the revenue but also posted a loss of $474,293 in sports betting. MotorCity followed with a 30% share, while Hollywood Casino at Greektown posted the only positive sports betting adjusted gross receipts of $175,905. Despite the challenges in retail sports betting, Michigan’s casinos collectively contributed $8.4 million in gaming taxes to the state. Additionally, the casinos submitted $12.8 million in taxes and development agreement payments to Detroit, which are crucial for the city’s infrastructure and economic growth. These figures highlight that while retail sports betting struggled, Michigan’s overall gaming industry continues to provide significant contributions to both state and local economies.

 

Despite the challenges in sports betting, Michigan’s iGaming sector reached a record $220.7 million in revenue, demonstrating the continued growth and strength of the online gaming market in the state

 

Conclusion

Michigan’s gaming market saw mixed results in October. While iGaming set new records, the decline in online sports betting highlights the volatility of this sector, influenced by unpredictable sports outcomes and external factors. Despite these challenges, the overall market showed positive growth, driven by the continued strength of the online gaming industry. Moving forward, the state’s gaming landscape will likely continue to evolve, with iGaming expected to maintain its upward trajectory while sports betting may experience more fluctuations due to the unpredictable nature of sports.