It was the busiest in Michigan’s sports betting history, but that did not translate into bigger revenues due to a low hold and millions of dollars in promo deductions.
High Volume – Low Revenue
A record $584 million in sports bets were accepted in November, towering above the $498 million reported in November 2022, and eclipsing the previous high of $551.1 million set in October. Online wagering through the state’s 12 digital sportsbooks accepted $568.2 million in November while the brick-and-mortar locations accounted for the remaining $15.3 million.
Although there was no shortage of wagers, the bettors were sharper than usual as the hold, or win rate, fell to a relatively modest 6%, generating $37 million in gross revenue between the mobile and retail sportsbooks combined.
But the overwhelming volume of deductions in November allowed the sportsbooks to write off millions of dollars in profit, which drastically reduced the taxes they would have been obligated to pay. The sportsbooks sent just $921,000 to the state, the third-lowest tax collection month this year.
FanDuel Leads the Pack
The duopoly of FanDuel and DraftKings continued their assault throughout the nation, including Michigan. FanDuel accepted $213 million in mobile bets, which equated to nearly 37.5% of the market share in the Wolverine State, while DraftKings reported a digital handle of $151.9 million, which translates to 26.7% of the Michigan market.
Combined, the two mobile sportsbook giants captured over 64% of the market, but DraftKings led in the revenue department with $10.6 million before deductions while FanDuel trailed with $9.7 million. DraftKings reported $5.9 million in bonuses while FanDuel doled out $6.9 million in bonus plays.
ESPN BET Launches
Penn Entertainment’s rebranded ESPN BET morphed from Barstool Sportsbook in the middle of the month when the new entry launched in 17 US states including Michigan. ESPN BET reported $33.6 million in deductions in just half a month in Michigan, far and away the most among the state’s dozen mobile sportsbooks.
Getting the word out is easier when generous signup bonuses and promotions are being handed out to the masses. The power of ESPN’s iconic brand is attracting plenty of attention even if the sports broadcasting giant is only lending their name to Penn Entertainment and not actually running the sportsbook. However, the sports betting company does have access to ESPN’s online app and its various platforms.
PENN Entertainment CEO and President Jay Snowden during the company’s Q3 call, “In connection with the launch, ESPN will be implementing an initial wave of exclusive integrations across the ESPN ecosystem, which includes 200 million unique monthly users in the US, more than 12 million of whom are regular users of the nation’s number one fantasy sports app at ESPN.”
Penn Entertainment has also entered Michigan’s online casino gaming market and replaced its Barstool casino with Hollywood Casino Online. Snowden had said previously that those states that feature online sports betting and online casino gambling would be a focus for the company and Michigan checks both boxes.
“As it relates to ESPN BET in specific states (and if there is added focus for success), I don’t know that I would look at one particular state. I mean, obviously, the ones that are going to be probably the most important long term for us are states that have both online sports betting and online casino,” said Snowden.
