FanDuel embraces sports gambling in Michigan with MotorCity deal


Michigan’s sports gambling market is getting full. Just in time for NCAA basketball’s March Madness, FanDuel has secured the last retail sports betting license through a partnership with Detroit’s MotorCity Casino Hotel. The deal allows the U.S-based sportsbook to launch retail operations at the gambling house, as well as offer online action once the Wolverine State greenlights virtual sports gambling. With this new partnership, all commercial sports gambling licenses have been issued.

Legal Sports Reportfanduel-embraces-sports-gambling-in-michigan-with-motorcity-deal tried to get feedback from FanDuel on the new agreement, but it preferred to keep quiet. However, the partnership is a huge coup for the leading sportsbook, which already controls 44% of the market in New Jersey and Pennsylvania. That success, according to company CEO Matt King, comes from proprietary technology and competitive pricing that is made possible by FanDuel’s parent company, Flutter Entertainment.

FanDuel is going to go up against MGM Resorts, which operates Roar Digital through a joint venture with GVC. Penn National completes the triad of commercial licenses, thanks to its purchase of the Greektown Casino-Hotel in Detroit from last year. Anyone else looking to grab a piece of the action, such as DraftKings, will have to rely on native tribes in the state as partners. Several entities, including Fox Bet and William Hill, have already made friends with Michigan tribes, so there aren’t many choices left.

Michigan’s road to legalized sports gambling wasn’t exactly smooth. Legislation was passed in 2018, but then-governor Rick Snyder, more than likely pouting over being replaced by Gretchen Whitmer, vetoed a number of bills, including an online sports gambling bill, as he was walking out the door. Whitmer put the tables back in place almost a year to the date of Snyder’s tantrum.

Michigan’s sportsbooks are expected to pay 8.4% of their revenue in taxes. Online casinos and poker were also approved by Whitmer, and these will be taxed according to the amount of revenue generated once the activity launches. For annual revenue up to $4 million, the operations will give up 20% and will increase to as much as 28% when revenue tops $12 million. An additional 3.25% will be taken from the commercial casinos to support local governments.

The sports gambling tax rate isn’t too hard on the sportsbooks, which could help the local market thrive and, once online activity begins, Michigan should be able to start seeing serious income from the activity. There currently is no scheduled date for online operations to begin, but they should see daylight before the end of the year.

FanDuel has the chance to clean up in Michigan, but only if it can keep its act clean. The company was just slapped on the wrist by regulators in New Jersey who determined that a couple of underage gamblers had placed wagers, and has to ensure it does a better job at policing its clientele and adhering to regulations, or face license suspensions. For its missteps, FanDuel was ordered to pay $2,000.