Michigan Might Finish 2023 as the Second U.S. Online Casino Market by Revenue

Online casino games are legal in six U.S. states, and Michigan has emerged as one of the most vibrant markets in the nation. Revenue data for the first 10 months of 2023 reveals that the Great Lakes State has generated $1.56 billion according to a report from the Michigan Gaming Control Board, and ranks third in the country. However, the second-ranked New Jersey has only a $10 million lead at $1.57 billion.

The battle for the second position will evolve into a race full of suspense until the last day of 2023, considering Michigan and New Jersey have nearly identical population numbers, but the Great Lakes State is experiencing higher growth in 2023. The number one market is Pennsylvania, with 1.71 million in revenue after 10 months, and having double the population of Michigan, it has an advantage in the race for the top market.

The official ranking will be available in January 2024 after every state’s regulatory agency collects and publishes the revenue numbers for 2023.

Promo Spending Makes Michigan Competitive 

The fact that the competition for the second market in the nation is nearly evenly matched is surprising when one takes into account that the Garden State market launched in 2018, three years ahead of Michigan, and hosts nearly 30 operators, which is double the number of licensed Michigan online casinos.

Yet, Michigan players are enthusiastic about casino games. Research data show that 82% of the gambling revenue in the Great Lakes State comes from online casinos. For comparison, online casinos account for 66% of New Jersey's revenue, where sports betting plays a prominent role in internet gambling.

One aspect working in favor of Michigan in this race is an upward growth trajectory in the first 10 months of 2023. Michigan experienced 23% growth compared to 2022, while New Jersey recorded a 15% year-on-year growth, and that spike can help propel Michigan to overtake the Garden State. The investments in promotions indicate one side is more committed to rewarding players after $156 million were spent on Michigan online casino promotions, while New Jersey invested $129 million on promotions, according to data from their respective regulatory agencies.   

Tax Revenue Bankrolls the State Treasury 

The growing market is providing additional funds for the state budget, which provides an average monthly revenue stream of $39.5 million for 2023. The lifetime tax revenue after three years has surpassed billion dollars, with 2022 providing $399.9 million in total tax revenue, and after 10 months in 2023, the state coffers have received $394.5 million.

Expectations were for 2023 to go over $500 million in tax revenue, and the current 18.8% increase in taxes collected compared to 2022 is a good signal that a $500 billion assessment might become a reality. However, the trend indicates that $473.5 million is the more realistic number for this year.

The money goes towards funding the School Aid Fund, which is the biggest recipient, followed by the Michigan Strategic Fund, Internet Gaming Fund, and local municipalities such as the city of Detroit and other towns receive their fair share of the funds taxed.