Michigan sports betting deductions reached near-record levels in September, lowering operator tax bills and state collections.
According to the latest state report released this week, Michigan sports betting apps deducted $25.3 million from the ledger in promotional play and other various deductions to reduce their monthly tax liability.
Gross revenue for MI sports betting operators landed near $44 million for the month, though just $18.7 million was taxable. Michigan state law allows for unlimited promo deductions each month.
With its 8.4% tax on adjusted online revenue, the state collected $1.7 million in monthly sports betting taxes.
Which MI sports betting apps deducted most?
September’s deductions were the second-highest ever in the state, behind only $26.5 million deducted in February 2022.
DraftKings led all online Michigan sportsbooks with $9.4 million in September deductions. The total made up 80.5% of DraftKings’ monthly gross revenue.
| Sportsbook | Online gross revenue | Allowable deductions | Percentage of revenue |
|---|---|---|---|
| DraftKings | $11.7 million | $9.4 million | 80.5% |
| BetMGM | $7.8 million | $5 million | 63.7% |
| FanDuel | $16.9 million | $7.7 million | 45.8% |
| Caesars | $3.4 million | $635,000 | 18.5% |
On par with other sports betting markets
The early season push for NFL betting customers, combined with sportsbooks’ ability to reduce their tax liability by passing out bet credits, typically leads to increased Michigan sportsbook promo offerings.
Michigan’s promotional deductions as a percentage of gross revenue were 57.4% in September.
Compare that to other key markets around the country, like Pennsylvania and Maryland, for example, which also allow sportsbooks to deduct unlimited promotional play for tax purposes.
- PA sports betting apps passed out $29.5 million in September free bets, the most ever in the market and 45% of reported revenue.
- Maryland sportsbooks offered $24 million in September promotions, the third most since the online market opened in November 2022. Deducted promos ran at 53% of reported revenue of the state’s first September with mobile sports betting.
FanDuel continues run in top spot
With $144.7 million in online September bets and $9.1 million in taxable revenue, FanDuel topped Michigan sports betting in both. FanDuel has accepted the most handle for the last 12 months.
DraftKings was second-best with $137.3 million in online wagers. Its taxable revenue was $2.3 million for September.
BetMGM ($78.2 million) and Caesars Sportsbook ($33.7 million) were next for monthly online handle. However, despite accepting noticeably fewer betting dollars during the month, both MI sports betting apps generated more net revenue than DraftKings.
BetMGM cleared $2.9 million in revenue, while Caesars took in $2.8 million after deductions.
MI sports betting by the numbers
Michigan sports bettors staked $457.7 million online in September, a 26% increase over last year.
The bump comes after nine consecutive months of year-over-year handle declines.
Michigan sportsbooks registered a 9.6% win rate, or hold, for the month, just above its lifetime average of 8.7%.
