Michigan gambling laws and competitive online gambling tax rates have sports betting operators and casinos eager to launch in the state.
With online casino games and sports betting about to take effect in Michigan, traders anticipate a strong market for their products as soon as the Michigan Games Control Board gives its final approval, which may be as early as Monday.
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Michigan has one of the lowest sports betting tax levels in the country, with an 8.4% state tax on revenue. The same applies to online sports betting, although taxes on online casino games vary from 20 to 28%, depending on the total casino revenue from online games. Other states charge much higher rates on sports betting, like Pennsylvania, at 36%.
Mike Raffensperger, director of marketing for FanDuel Group, said Michigan’s tax rates are comparable to those in New Jersey, which has an 8.5% tax for face-to-face sports betting and a 13% tax for those made online. .
These competitive rates helped lead to a national betting record of $ 6 billion on New Jersey sports betting in 2020, according to the state’s Gambling Enforcement Division, with almost 92% of the money betting on New York sports betting Jersey made online.
“Michigan is extremely exciting from a market perspective,” Raffensperger told MLive. “The legislation and regulations, I think they were done in a really smart way. It has created a good mobile online register, has a sustainable tax rate and is a good open and competitive market. Those are the three things that states have really been successful at, like New Jersey and others – that’s what they did and what Michigan replicated. ”
Michigan also has a rich sports history with professional teams in all four major sports and two prominent colleges in Michigan and the state of Michigan.
“There is an extremely popular sports culture, not only on the side of the professional team, but there are also some extremely popular university teams,” DraftKings President and co-founder Matt Kalish told MLive. “In sports books, two of the top five sports are college basketball and college football. So, when you have the Spartans and Michigan, these are very popular university organizations that have been very successful and have a lot of fans. I think it really helps to build the general audience for something like a sportsbook. Ultimately, it is just a way to get in the game about the sports you are watching. Therefore, the more sports consumption that is happening in the state, the better our product will be. “
Michiganders has been able to place legal personal sports bets in casinos in the state with sports bets in operation since March, but the COVID-19 pandemic has restricted highly anticipated launching.
Detroit’s three casinos – Greektown, MGM Grand and MotorCity – were forced to close several times and had to operate at reduced capacity when opened, while many of Michigan’s tribal casinos were also not operating at full capacity.
Online casino games and sports betting can be a way for casinos to make up for the substantial losses incurred in 2020, while generating millions in tax revenue for the state and Detroit.
But the process of getting online betting up and running has been scrupulous.
Governor Gretchen Whitmer signed a legislative package in December 2019 that allows Michigan’s commercial and tribal casinos the opportunity to provide their own online offerings, including mobile sports betting options.
But establishing rules for online gambling was arduous, as the MGCB established an entirely new structure that incorporated the licensing process, standards and regulations and penalties for non-compliance.
After more than 12 months since Michigan became the 20th state to legalize sports betting, operators are only waiting for final approval to start accepting bets, which they hope will happen before the Super Bowl on February 7.
“We’re working with the state regulator to make sure we do it right and the entire category does it right, which is to make sure our app works properly only if you’re within Michigan’s state limits, which we have the proper identity checks so that only adults can participate and other things that really matter in terms of how sports betting needs to be launched legally and safely, ”said Raffensperger. “These things just take time to make sure everyone is satisfied with getting it right.”
RELATED: What to know as Michigan prepares to launch online gambling and sports betting
Only licensed Michigan casinos are allowed by law to offer online gambling and sports betting, but with three commercial casinos and the 12 federally recognized Indian tribes that operate the 24 tribal casinos in the state, there will be ample online betting options for bettors.
Each casino that is preparing to launch online bets has a partnership with a platform provider for sports betting, casino games and poker. For example, FanDuel partnered with MotorCity, DraftKings partnered with Bay Mills Resort & Casino in Brimley, while Fox Bet partnered with Little Traverse Bay Bands of Odawa Indians, which operates casinos in Petoskey and Mackinaw City.
MGCB Executive Director Richard Kalm said that not all operators will launch when the board gives final approval, but there may be more than 10 mobile betting options by the end of the year.
In some states, like Rhode Island and New Hampshire, there is only one.
However, Kalish said the main competition for DraftKings, which offers online betting in 10 other states, is offshore sportsbooks.
“We are not going to assume it will be a (very) competitive market,” said Kalish. “There will be a lot of different options for consumers, and we love that. I think we always believe that the best product and experience wins, and we are very comfortable in maintaining this type of market. “
The MGCB last month approved provisional licenses for 15 platform vendors, allowing them to launch their applications before launch (bets cannot yet be placed until final approval).
Many sportsbooks offer sign-up bonuses and other promotional offers.
“With a competitive market, there are a lot of great promotions, really fun things that we usually do and that consumers can take advantage of,” Kip Levin, Fox Bet’s CEO, told MLive. “At the end of the day, you are seeing it elsewhere (other states with online betting) if you pay attention to the type of sports betting social media or see some of the other things happening (advertising) in neighboring states. Much of the way customers engage is through fun promotions, so I think this is just the beginning, but it will be a big part of the way the industry will come out.