ESPN Bet Joins Michigan Sports Betting Market As Deductions Rise, Taxes Fall

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Michigan sports betting

Tax collections from online Michigan sports betting dropped in November to some of the lowest levels this year, as ESPN Bet entered the market backed by a heavy promotional push.

The latest figures out of the Great Lake State show Michigan sports betting apps sending $921,000 to the state in November taxes. It is the third-lowest monthly total this year:

The low revenue number comes despite Michigan sports betting apps hitting the highest volume ever in November, with $568.8 million in online bets. It was an 18.5% jump over the $480 million staked online in November 2022.

Michigan sports betting tax bills

MI sportsbooks can reduce their tax bill by deducting promotional credits from their monthly winnings.

Operators also kept 6% of online bets in November, one of the lowest win rates in recent history.

Deducting promotional play, along with other various deductions and fewer sportsbook winnings, contributed to lower tax collections in November.

MI sports betting welcomes ESPN Bet

ESPN Bet launched in Michigan on Nov. 14 behind substantial promo spending.

The app operated by Penn Entertainment unleashed about $16.2 million in free bets to bring in customers after missing the traditional acquisition period in September with the start of NFL and college football betting.

The possibility of bet credits drying up from other brands left Penn CEO Jay Snowden feeling optimistic about a mid-November launch backed by a fresh batch of freebies.

Promos drive ESPN Bet handle

Penn’s heavy promotional offering helped drive record-high write-offs of $33.6 million from free play and other deductions market-wide.

The bonuses also pushed Penn to near-record volume at $49.9 million, about 9% of all online handle. November’s total was less than $100,000 shy of Penn’s all-time Michigan high from January 2022, when it still operated Barstool Sportsbook.

With the ability to remove promotions and other allowable deductions from the ledger, Penn posted $10.1 million in November losses.

MI sports betting record-setters

FanDuel and DraftKings followed up record-setting Octobers with more personal bests in November.

FanDuel accepted $213 million in online bets, good for nearly 37.5% of all online MI sports betting last month.

DraftKings took in $151.9 million online for a 26.7% share of handle.

Market-leading revenue

DraftKings kept $10.6 million in revenue before deductions. It is the first time DraftKings earned the most Michigan sports betting revenue this year.

FanDuel won $9.7 million from bettors last month. It offered about $6.9 million in November free play compared to DraftKings’ $5.9 million in bonuses.

The two rivals combined for 60% of the $33.9 million gross Michigan sports betting.

BetRivers handle tumbles

One month after posting its own Michigan best, BetRivers saw its online handle drop more than 66% to $15.3 million.

It also lost money for the second consecutive month, down $1 million in November.