The month of July was expected to be a down month for the US legal sports betting industry, thanks to the lack of a marquee wagering event and a limited sports betting menu. What was not expected was the gravity of the month-to-month drop-offs that participating jurisdictions experienced during July’s 31 days.
Michigan, on Monday became the latest state to report a double-digit handle decline for July. While small, incremental drops have been the norm in the state since the month of March, optimism remained with revenues climbing despite overall betting activity declining. July, unfortunately saw sharp drops in every metric related to the state’s sports betting scene.
“Pursuits other than gaming are priorities for many in July, whether that is a trip to the lake or a backyard barbecue,” said Matt Schoch, analyst for PlayMichigan.com. “The good news for sportsbooks is that with the July dip now out of the way, operators can look forward to Michiganders returning from their summer vacations and for the excitement for the football season to build.”
Diving Into the Handle, Both Overall and Mobile
Michigan’s online and retail sportsbooks combined to take in just $206.3 million in bets in July, which represents a sharp month-to-month 20.5% drop from the $259.4 million in June. July’s totals are the lowest for the state since, $150.8 million was reported by the state’s sportsbooks in January, when the more lucrative mobile platform went live on the 22nd of that month.
Perhaps a bigger story is the mobile handle slipping under the $200 million mark for the first time since it went live. Mobile apps accounted for just $188 million of the overall handle in July, down $47 million or 20% from the mobile take from June. Retail sports betting facilities contributed $18.2 million to the state’s overall legal sports betting handle.
What About Revenues?
There had been a pattern emerging within the broader US legal sports betting industry of handle declines, coupled with healthy revenue increases. That trend at least mitigated some of the concerns about the seasonal betting drop-off. July has seen an end to that trend in all of the jurisdictions that have reported so far.
In Michigan, gross gaming revenues fell an eye-opening 21.6%, from $24.9 million in June to $20.8 million in July, good for a 10.1% hold. State and local tax coffers benefitted to the tune of about $1.1 million of Michigan sportsbook profits.
The Good News
The good news is that there is nowhere to go but up for the legal sports betting scene in Michigan. And with the impending start of the Detroit Lions NFL campaign as well as the Michigan Wolverines and Michigan State Spartans NCAA season, the $359.5 million March handle record will likely fall for the Michigan industry as soon as September. Mobile sports betting apps will take wagers on the Lions, Wolverines and Spartans for the first time starting next month.
The online casino industry in Michigan will also continue to see a boost thanks to the launch of live dealer casino games. All of the biggest providers in the Michigan market have launched or are in the process of kicking off their live dealer offerings, which should immediately add to online casino profits for the state’s providers.
“Many of the same forces that slow sports betting in the summer, including summer vacations, also affect online casinos,” Eric Ramsey, data analyst for PlayUSA.com said. “Michigan is still a young market that hasn’t yet reached maturity. The addition of live dealer games will make a difference going forward. And as the summer turns to fall, we should once again see the revenue at online casinos grow.”
It was a well-known fact that the US legal sports betting industry was going to be in tough throughout the summer. August figures to be another rough time but September is within reach. Then and only then will we see a significant bounce back for the Michigan legal sports betting industry.