September 8, 2020
Michigan is prepping for its first online casino and poker room. If the Regulatory authority decides to issue a license, the state’s first online casino could be operational before October 2020. In the worst-case scenario, operations start by early 2021.
Michigan is a potentially huge iGaming market. With a population of 10 million people, it is scheduled to be the second-largest legal online gambling market, following Pennsylvania. However, it is difficult to predict how the situation will pan out. iGaming is a very touchy topic in the US and with COVID-19 raging, the authorities are yet to take the final call.
Further aggravating the situation is the continued expansion within the sports betting industry, followed by major deals between the biggest operators. However, once operational, the state’s sports betting revenue could be as high as $93 million in taxes in the first year!
Gross revenue from both online and physical casinos will be taxed by 8.4%. While the three casinos in Detroit pay an additional 1.25% city tax. Michigan is currently home to 26 brick-and-mortar casinos. All of which are expected to offer sports betting and iGaming services once the new legislations are announced.
When compared to New Jersey’s 9.75% taxes on land-based casinos and 13% taxes levied on online operators, along with Pennsylvania’s whopping 36% taxes on sports betting, Michigan could soon emerge as the iGaming hub of the US. The state’s lawmakers cleared House Bill 4916 back in December 2019, paving the way for the legalization of retail and online sports wagering.
With the addition of online poker to the list, Michigan became one of the first legal gambling markets in the US. More games on offer could consequently attract a larger crowd. Thus, hinting at a greater revenue for both the operators and state coffers within the next few years.
According to initial estimates, the sports betting industry should generate $400 million in revenue within the first year. Filling $33.6 million in state coffers. Mobile betting will likely be at the frontlines of popularity, according to growing consensus.
The government could tax online casinos between 20 and 28%, as per a tier system based on earnings. With a projected $250 million in gambling and poker revenue in the first year, the state coffers should be richer by around $60 million. Thus, pegging total revenue at $650 million and taxes at $93.6 million!
In summary, iGaming in Michigan will operate at a grand scale, and the business should quickly overshadow Pennsylvania and New Jersey in popularity and revenue. Further adding to the positives is the two dozen or so tribal casinos gaining access to the online gambling market.
However, the timeline is debatable considering everything that is happening around us. Unless it is official, we can only speculate the deadline. But, waiting periods are likely to be cut short.
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