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What The Michigan Sports Betting Numbers Are Really Telling Us

Ten days. That’s how much data we have on the Michigan sports betting and online casino market after the Michigan Gaming Control Board released the January revenue report. That tiny snippet is already eliciting plenty of takes, but what can this limited information tell us?

The answer is not much. That said, there are two (interconnected) things we can extrapolate about the nascent market:

  1. Barstool Sportsbook was the clear winner and an outlier in the market.
  2. The state is not going to like the only sports betting number it cares about, tax revenue.

What Sportsbook Won the First Ten Days?

Like all data slugs, it depends on which excel column you sort by.

If we sort by handle, it’s FanDuel that leads the way.

OperatorHandleGross Gaming RevenueNet Gaming Revenue
FanDuel$32,602,738.39$622,371.71$(5,679,061.41)
DraftKings$28,190,633.66$3,377,189.27$(1,186,886.61)
Barstool Sportsbook$27,482,237.63$3,330,772.36$1,698,246.04
BetMGM$22,789,888.82$5,096,934.43$(53,434.75)
PointsBet$1,491,196.18$388,380.13$(34,609.75)
BetRivers$1,073,194.93$191,260.50$(93,561.93)
William Hill$692,318.64$125,659.49$51,202.52
TwinSpires$327,660.81$39,792.41$(8,244.09)
WynnBET$248,878.53$60,231.58$27,539.58
FoxBET$160,051.53$70,737.43$50,472.43
Golden Nugget$106,903.52$29,697.97$11,726.25

But if we sort by gross gaming revenue, the title goes to BetMGM.

OperatorHandleGross Gaming RevenueAdjusted Gaming Revenue
BetMGM $22,789,888.82 $5,096,934.43 $(53,434.75)
DraftKings $28,190,633.66 $3,377,189.27 $(1,186,886.61)
Barstool Sportsbook $27,482,237.63 $3,330,772.36 $1,698,246.04
FanDuel $32,602,738.39 $622,371.71 $(5,679,061.41)
PointsBet $1,491,196.18 $388,380.13 $(34,609.75)
BetRivers $1,073,194.93 $191,260.50 $ (93,561.93)
William Hill $692,318.64 $125,659.49 $51,202.52
FoxBET $160,051.53 $70,737.43 $50,472.43
WynnBET $248,878.53 $60,231.58 $27,539.58
TwinSpires $327,660.81 $39,792.41 $(8,244.09)
Golden Nugget $106,903.52 $29,697.97 $11,726.25

And sorted by net gaming revenue, the crown switches again, this time to Barstool.

OperatorHandleGross Gaming RevenueAdjusted Gaming Revenue
Barstool Sportsbook $27,482,237.63 $3,330,772.36 $1,698,246.04
William Hill $692,318.64 $125,659.49 $51,202.52
FoxBET $160,051.53 $70,737.43 $50,472.43
WynnBET $248,878.53 $ 60,231.58 $27,539.58
Golden Nugget $106,903.52 $29,697.97 $11,726.25
TwinSpires $327,660.81 $39,792.41 $(8,244.09)
PointsBet $1,491,196.18 $388,380.13 $(34,609.75)
BetMGM $22,789,888.82 $5,096,934.43 $(53,434.75)
BetRivers $1,073,194.93 $191,260.50 $(93,561.93)
DraftKings $28,190,633.66 $3,377,189.27 $(1,186,886.61)
FanDuel $32,602,738.39 $622,371.71 $(5,679,061.41)

If you consider all three columns, only one operator had what would be a typical looking month in a mature market, Barstool. Barstool finished a competitive third in handle and GGR and was the runaway leader in terms of NGR – Barstool was the only operator with measurable NGR.

Everyone else was busy handing out mountains of promotional money to attract customers. The company’s founder Dave Portnoy explained the discrepancy between Barstool and its competitors on Twitter.

Which lines up with what I’ve been saying about Barstool all along.

Here:

So, while its competitors are busy signing “semi-exclusive” sponsorship deals with teams that have all the authenticity of an arranged marriage, Barstool will simply flip the social media switch. It will leverage its ability to engage with millions of peoples and call on existing, real relationships in seconds.

And here:

The general feeling is, Barstool needs to fit itself into the sports betting box. However, that overlooks the possibility that Barstool alters the sports betting box or creates a new one.

[…]

The idea that they have to follow the standard model doesn’t hold water. No other sports betting company has entered the space with the assets Barstool possesses, so comparing them to what has come before or charting their trajectory based on industry norms doesn’t make sense. But it’s precisely what most people are doing.

At some point, the industry writ large will need to take its head out of the sand and realize that customers who chose you because of a celebrity billboard or deposit bonus are only as loyal as the next billboard and deposit bonus. Those are necessary pieces of marketing, but they’re not the entire puzzle.

These Are Not the Sports Betting Numbers You’re Looking For

Along the same lines, that promotional spend led to many red numbers for operators, which translates into very little tax revenue for the state. Tax revenue is based on NGR and not GGR, allowing Michigan sportsbooks to deduct promotional money from their tax liability.

I’m sure lawmakers who were sold a multi-billion-dollar industry (wagers) are perusing the January numbers are scratching their heads when they see $115 million in handle, $13.3 million in revenue, and… drumroll… $111,695.89 in tax revenue.

Most operators paid zero, including FanDuel, BetMGM, and DraftKings. Barstool paid $99,856.97 of the total, roughly 90% of all sports betting tax collected.

And just by way of comparison, ten days of online casino in Michigan produced GGR of $29.4 million, AGR of $27.5 million, and a tax liability of $4.3 million.

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