Michigan sportsbooks suffer first monthly handle drop since July

Michigan sportsbooks suffered a monthly handle drop for the first time since July 2021 in February, as betting was hit by the lack of football action.
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Michigan sportsbooks suffered a month-over-month handle drop for the first time since July 2021 in February, as sports betting in the state was hit by the lack of football action during the month, according to PlayMichigan.

The Wolverine State’s online and retail sportsbooks combined to take in $423.8m in February wagering, down 20.4% from January’s $532.7m due to the end of the NFL and college football seasons. However, the month’s handle was still up 30.2% year-over-year (February: $325.6m).

Meanwhile, online casinos were not impacted by any seasonal factors, setting a fresh revenue record with more than $120m.

Paul Costanzo, the lead analyst for PlayMichigan.com, commented: “Michigan sportsbooks flew out of the gates in 2021 and the growth since has been relentless. The rapid growth over the last year will be nearly impossible to maintain in the year ahead, but the upward trajectory of the industry will continue into the foreseeable future.”

According to official data released by the Michigan Gaming Control Board, online sportsbooks in the Wolverine State attracted $398.4m in February bets, a 19.8% decrease from January’s record $496.8m, and a 32% YoY growth (February 2021: $301.9m). Retail wagering at Detroit-area casinos accounted for $25.4m of the month’s handle. 

Online sportsbooks generated gross revenue of $22.5m from February’s bets, up 137.6% YoY (February 2021: $9.5m) but a decrease from January’s $34.7m. However, due to retail suffering a revenue loss of $896,939, Michigan’s sportsbooks won $21.6m for the month. 

After $26.5m in promotional credits, sportsbooks recorded a $4.8m loss in taxable revenue, yielding just $581,548 in taxes. Since legal sports betting launched in the state in 2020, Michigan’s sportsbooks have generated $5.1bn in wagers, producing nearly $400m in revenue.

February is typically a slower month for sportsbooks than either January or March due to the drop in sporting events, despite the popularity of the Super Bowl. However, sports betting should pick up in March thanks to the NCAA’s March Madness basketball tournament.

Eric Ramsey, an analyst for the PlayUSA.com Network, which includes PlayMichigan.com, stated: “The period between the Super Bowl and March Madness is always relatively slow for sportsbooks.

“The NCAA Tournament should push betting back over the $500m plateau, and wagering could move even higher if Michigan or Michigan State can go on a surprise run.”

Broken down per operator, FanDuel led the way with $122.4m in online bets (January: $132.7m. Combined with its retail vertical, the sportsbook won $4.4m in gross revenue. DraftKings followed with $94.7m in online bets (January: $132.0m), winning $4m in gross revenue. 

BetMGM was third with $86.7m in February online wagers (January: $110.9m). However, combined with its retail vertical, the sportsbook achieved a state-best $5.8m in gross revenue.

“Baseball’s lockout was really the only major concern for sportsbooks because it is the main attraction for bettors during the otherwise slow summer months,” added Ramsey.

“With the lockout now over, Michigan’s sportsbook operators can look forward to the first normal sports year since the state legalized sports betting.”

Michigan’s online casinos and poker rooms achieved a new revenue record in February, posting $122.8m, beating the previous best set in December last year of $121.8m despite the month having fewer days.

The record revenue equated to $4.4m per day in February (December and January: $3.9m per day), yielding $21.6m in state taxes and fees.

Costanzo concluded: “It would not be shocking for Michigan to surpass New Jersey and Pennsylvania to become the largest online casino market in the US by the end of the year. Online casinos consistently produce huge amounts of revenue, and the industry’s importance to the state budget will only grow.”