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Michigan legalized online sports betting and officially launched with 10 operators on Jan. 22. The results from the month of January are out and show a close race between the top four operators.
What Happened: For the first 10 days of legalized online sports betting, Michigan had $115.2 million placed on bets. The state’s online sports betting operators reported $29.4 million in revenue, according to Play Michigan.
FanDuel, owned by Flutter Entertainment (OTC: PDYPY), led the way with $32.6 million in bets and a 28.3% market share. DraftKings (NASDAQ: DKNG) came in second with $28.2 million in bets and a share of 24.5%.
Barstool Sportsbook from Penn National Gaming (NASDAQ: PENN) had $27.5 million placed in bets and 23.9% market share. BetMGM from MGM Resorts Intl (NYSE: MGM) had $22.8 million placed in bets and a 19.8% market share.
There was a large drop after the top four operators. PointsBet had $1.5 million in bets, BetRivers from Rush Street Interactive (NYSE: RSI) had $1.1 million in bets.
How Barstool Is Winning: The amount of money taken on bets and market share may not tell the whole story of who the winner is.
A large amount of money was spent on bonuses and promotional offers by the sports betting operators to attract new customers.
BetMGM, FanDuel and DraftKings spent $5.2 million, $6.3 million and $4.6 million, respectively, on bonuses for the first 10 days. The large spending gave all three of the top four sports betting operators negative earnings on the bets taken in.
Barstool Sportsbook spent $1.6 million on bonuses, which was the lowest of the top four operators. As a result, Barstool made money in the 10 days on the bets they took in. The 5.9% bonus as a percent of handle from Barstool was the lowest of the operators.
The $1.7 million in net gaming revenue from Barstool was the highest in the state.
This is it. This is the graph. And keep in mind it still doesn’t include ad spend. Other gambling companies need to spend millions and give away millions in bonuses to compete with us. It’s paying for headlines and publicity vs being the headline. Good luck. $penn pic.twitter.com/lmzo9EsvN2
— Dave Portnoy (@stoolpresidente) February 17, 2021
The results in Michigan could show that Barstool’s strong brand awareness and fan following helped it take a top-four position with limited promotional spending.
What’s Next: The early results in Michigan show what many industry analysts predicted all along: The race for first and second would be between DraftKings and FanDuel, while the race for third would be between BetMGM and Barstool.
The last big state launch for online sports betting was Tennessee in November. The state was $131 million in its first month. The state launched differently than Michigan with a Nov. 1 launch giving it a full month and retail operators going live the same month, compared to Michigan that tiered the legalization.
A full month of Michigan sports betting figures could be a “game changer,” Play Michigan wrote.
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