Michigan Poised for March Madness Sports Betting Launch

Written by Chris Monti

Michigan Poised for March Madness Sports Betting Launch

Michigan could launch legal sports betting in time for March Madness if regulators grant final approval at a meeting on Tuesday. Three Detroit casinos are ready to launch retail sportsbooks head of the March 17 tip-off of the most important American wagering event of the year. MGM Grand Detroit, Motor City Casino and Greektown Casino have sports betting partners in place, and the Michigan Gaming Control Board is racing to finalize the launch plans.

If the casinos gain approval at the March 10 meeting, Michigan would become the 15th state to accept legal sports wagers. Gov. Gretchen Whitmer signed a bill that legalized sports betting just before Christmas, covering both retail and online sportsbooks. However, online books will not be able to launch until 2021, as the Michigan Gaming Control Board is still working on the regulatory framework for them.

Michigan will impose a revenue tax of 8.4% on revenue from retail sportsbooks. That would rise to somewhere between 20% and 28% for online sportsbooks, depending on how much money a casino generates. Each online operator must be tied to a brick and mortar casino, as is the case in many states with legal sports betting. Most of the tax revenue will go to the School Aid Fund, which funds K-12 schools in state. Another $4 million a year is earmarked for firefighters that contract cancer due to exposure to smoke and chemicals.

A Wealth of Potential

Michigan has the potential to be a major sports betting market. It has a larger population than New Jersey and there are four major sports teams in Detroit – the Lions, Pistons, Red Wings and Tigers. The tax rate looks reasonably friendly compared to states like Pennsylvania. The state is looking forward to gaining significant revenue from the new industry, hence the desire to launch in time for the 2020 Men’s NCAA Basketball Tournament.

“This is going to bring new revenue, I think, and I think that people will be excited to get out there, test the product out and try it,” said Rep. Brandt Iden, who sponsored the sports betting bill last year. “They’re going to be able to go out and bet on their team to win the tournament...it gives them vested interest.”

Michigan’s independently regulated tribal casinos are also allowed to launch retail sports betting operations. The Grand Traverse Band of Ottawa and Chippewa Indians announced last month that William Hill would be opening sportsbooks in two of the tribe’s Northern Michigan casinos ahead of the 2020 football season. “Michigan will be a key state in William Hill’s U.S. expansion due to its large population and deep rooted-sports culture with so many popular college and pro sports teams,” said William Hill US chief executive Joe Asher.

PointsBet and Fox Bet have also tied up deals with various Michigan tribes to gain a foothold in the state’s sports betting market. Casinos can only have one sports betting partner. Penn National owns Greektown Casino, so it will launch its own sportsbook there. MGM will launch a sportsbook as part of its joint venture with Ladbrokes Coral owner GVC, Roar Digital. FanDuel, the market leader in New Jersey and Pennsylvania, has now tied up a deal to be the sports betting partner for Motor City Casino, the final Detroit casino gearing up for an imminent launch.

Illinois Races to Hit March Madness Deadline

Gov. J.B. Pritzker has also promised sports fans in Illinois that legal sportsbooks will be launched in time for March Madness. He made the promise a fortnight ago, but no sportsbooks have opened their doors yet. The tournament is now just 11 days away, and regulators are scrambling to get the industry up and running. Argosy Casino in Alton, Rivers Casino Des Plaimnes, and the Grand Victoria Casino in Elgin received temporary permits to offer sports betting this week, and they are just waiting for the nod.

The two Hollywood Casinos in Aurora and Joliet and Par-A-Dice Casino in Peoria have already gained temporary licenses. The Fairmount Park racetrack in Collinsville is also awaiting approval. FanDuel and DraftKings are excluded from the Illinois industry for the first 18 months under a “bad actor” clause relating to their previous Daily Fantasy Sports offerings in the state. That will give local operators an opportunity to build up strong relationships with sports bettors before that duo muscles in.

Neighboring states Indiana and Iowa are already accepting legal sports bets. When Michigan and Illinois go live, it could become the biggest region for sports wagering in the country, at least until New York offers online sports betting or California opts for legalization.

A Flurry of Activity Across the Country

The list of states with legal sports betting currently includes Nevada, Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, New Hampshire, Rhode Island, New Mexico, Arkansas, New York, Iowa, Indiana and Oregon. Illinois and Michigan will soon be added to that list. Montana, Colorado, Tennessee and North Carolina have all legalized sports wagering too, and they are just pending launch. That takes the total to 20. The District of Columbia and Puerto Rico have also legalized sports betting.

Legislative efforts are underway in almost every other state in a bid to join the regulated industry. This week a bill that would legalize sports betting in Maryland was amended and it is now close to gaining approval in the Senate. It would then need to pass the House, gain gubernatorial approval and go before voters on the November ballot. The South Dakota House also passed a proposal to put a legalization measure on its November ballot. It passed in a 36-27 vote.

The Kansas Senate recently approved a sports betting bill, SB 283, in a 23-15 vote this week. It must now go to the House, which is already considering a rival bill. In Massachusetts, a legislative panel tasked with study the feasibility of legal sports betting produced draft regulations this week. The proposal would permit both online and retail wagering on professional and collegiate events. A revenue tax rate of 10% would be imposed on retail sportsbooks and 12% on online sportsbooks.

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