Michigan Could Carve A Slice Out Of Indiana Sports Betting Pie

Posted on December 17, 2019 - Last Updated on December 18, 2019

If at first you don’t succeed, try again.

That’s been the mentality of Michigan lawmakers regarding a bill to legalize sports gambling throughout the state. The gambling expansion bills now sit at the governor’s desk for the second-straight year.

With gambling expansion imminent in the Wolverine State, Indiana should prepare for what it could mean for its nascent legal sports betting market.

Michigan gets gambling expansion through legislature, again

Despite widespread bipartisan support, the original 2018 bill died with a veto by Republican Gov. Rick Snyder as one of his final acts in office. Among the reasons he cited were potential negative effects on the Michigan Lottery and existing land-based casinos. 

Democrat Gretchen Whitmer succeeded Snyder earlier this year and efforts to pass a sports gambling bill were reignited.

Negotiations with Gov. Whitmer progressed throughout the year. Her biggest sticking points dealt with the tax rate and protecting the School Aid Fund, which is financed by the Michigan Lottery.

After some last-minute modifications by the Michigan Senate, the new bill received final approval from the House of Representatives on Dec. 11. That was the final day of Michigan’s legislative session for the year.

Michigan sports betting bill compared to Indiana’s structure

The gambling expansion bill would allow any of Michigan’s commercial or tribal casinos to apply for a sportsbook license.

The license itself comes with a $100,000 price tag, an application fee of $50,000 and an annual renewal fee of $50,000 for approved casinos. That’s an identical setup to Indiana, although the Hoosier State doesn’t require an application fee.

Michigan’s proposed tax rate of 8.4% of the adjusted gross revenue would also be a bit lower than the 9.5 % mark that Indiana charges

Gov. Whitmer is expected to sign the bill into law soon. The hope is the state’s casinos will be accepting in-person bets in time for the Super Bowl. Online betting throughout Michigan would likely follow soon after.

How legalization in Michigan could impact Hoosier State revenue

The legalization of sports betting in Michigan could have effects on the blooming market in Indiana. Currently, Indiana benefits from traffic from nearby states that don’t yet offer legal sports betting.  

The Ameristar Casino’s sportsbook is the most profitable one in Indiana. One reason is its proximity to Chicago, but it’s also less than an hour away from the Michigan border. 

In the month of November alone, Ameristar brought in over $4 million in taxable revenue from its sportsbook. With fewer residents making the trek to East Chicago for their sports gambling needs, that income could take a hit from legalization in Michigan.

The other commercial casino in the area that could potentially see a drop in its revenue is the Blue Chip Casino in Michigan City, Indiana. Their sportsbook saw the second-most traffic in the state during November, which amounted to nearly $2 million in taxable income.

An even more important question for Indiana is potential effects on a strong and growing online sports betting market.

Indiana online sports betting handle could take a hit too

Indiana would likely see its income from online sports betting apps decrease as well. DraftKings has established itself as the dominant mobile betting app in the Hoosier State and managed to bring in more business than competitors FanDuel and BetRivers combined last month.

So far, DraftKings’ partnership with the Ameristar Casino has been a profitable one. Out of Ameristar’s $72 million in handle from November, $64 million came in through DraftKings.

Currently, Michigan residents can simply cross the state line into Indiana to place their online sports bets. With legalization in Michigan, the revenue from those quick trips across the border would be lost to wagers placed from couches at home.

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Jake Garza

Jake Garza is a sports writer based in Indianapolis, IN. He's an Indiana University graduate who's spent time as a sports reporter covering teams at the prep, collegiate and professional levels.

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