August 16, 2021 Sports Betting, Casino, Land Based

Michigan’s sportsbooks suffer from ‘July dip’

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Sports betting handle down last month, but online casinos stay consistent.

Michigan’s online sportsbooks saw their lowest ever volume for a full month, dropping to less than $200m for the first time since online sports betting launched in January.

Official data was released Monday by the Michigan Gaming Control Board and analyzed by PlayMichigan, which is part of the PlayUSA.com Network.

PlayMichigan noted July typically is a slow month for sports wagering.

Michigan’s online sportsbooks generated $188.0m in bets during July, down 20% from $235.1m in June. Combined with $18.3m in retail wagering in July, which was announced last week, Michigan’s online and retail sportsbooks accounted for $206.3m in wagering last month, a decline of 20.5% from $259.4m in bets in June.

The July total is the lowest volume recorded in a month since sportsbooks collected $150.8m in January, when online betting first launched on Jan. 22.

Gross gaming revenue from online betting fell 21.6% to $19.6m from $24.9m in June, pushing the state’s combined win to $20.8m for the month. After promotional credits, $12.4m in taxable revenue remained from online bets, down from $16.8m in June.

July’s online revenue produced $1.1m in state and local taxes, officials said.

According to PlayMichigan, sports betting volume has remained low since April, part of an expected seasonal slowdown. Analysts noted sportsbooks have countered the loss in wagering with a gain in hold percentage, which is the money the house keeps after paying out winning bets.

The hold in July for online and retail sportsbooks was 10.1%, joining June as the only two full months with a percentage above 10% since online betting launched in Michigan in January.

July’s wagering still was enough for sportsbooks to nearly reach $2 billion in lifetime online handle, while casino revenue ticked up and surpassed $500m lifetime, noted Matt Schoch, analyst for PlayMichigan.com.

“Pursuits other than gaming are priorities for many in July, whether that is a trip to the lake or a backyard barbecue,” Schoch said in a statement. “The good news for sportsbooks is that with the July dip now out of the way, operators can look forward to Michiganders returning from their summer vacations and for the excitement for the football season to build.”

Eric Ramsey, data analyst for the PlayUSA.com Network, added, “Bettors interact with summer sports such as golf and even the Olympics differently by placing more futures and novelty bets, which win less frequently than a conventional single-game bet on football. For this reason, sportsbooks can bridge the slower betting months.”

The race for the online market lead drew closer in July, Play Michigan said. FanDuel led all online operators in July with $54.5m in wagers, down from $77.3m in June. FanDuel also topped Michigan operators with $7.8m in gross sports betting revenue, down from $10.3m in June.

DraftKings was second in the state with $53.4m in wagers, down from $56.5mthe previous month. Gross gaming revenue fell to $3.1m from $5.0m in June. BetMGM was third with $41.0m in wagers, down from $52.1m in June. That produced $5.0m in gross receipts, down from $6.1m in June.

“The Olympics were never going to drive enough volume for operators to overcome a typically slow summer month, especially with the time-zone difference between Michigan and Tokyo,” Schoch assessed. “But the Olympics did offer an opportunity for sportsbooks to reach a new segment of customers that they wouldn’t have otherwise. That could pay dividends down the road.” 

Online casinos, poker hold steady

Michigan’s online casinos and poker rooms combined to produce $92.3m in gross gaming revenue, up 3.5% from $89.2m in June.

Casinos took in $3.0m per day in wagers over the 31 days of July, a rate consistent with the $3.0m per day in June. That revenue was enough to yield $17.1m in state taxes and $6.4m in local taxes.

Live dealer online casino games launched in Michigan on July 22, which PlayMichigan said likely drove additional wagering later in the month.

Since launching in January, online casinos and poker rooms have generated $575.4m in revenue and $141.8m in state and local taxes.

BetMGM/MGM Grand Detroit continued to dominate the online casino and poker market with $33.8m in gross gaming revenue, which yielded $8.9m in state and local taxes.

DraftKings/Bay Mills was second in the state with $15.2m in gross receipts, producing $3.8m in state and local taxes. FanDuel/Motor City was third with $14.4m in gross receipts and $3.8m in state and local taxes.

“Many of the same forces that slow sports betting in the summer, including summer vacations, also affect online casinos,” Ramsey said. “Michigan is still a young market that hasn’t yet reached maturity. The addition of live dealer games will make a difference going forward. And as the summer turns to fall, we should once again see the revenue at online casinos grow.”

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