What Iowa Could Learn From Online Casinos In Michigan

Written By Dan Holmes on August 14, 2023
Iowa online casinos learn michigan

Over the summer,  an attempt to legalize Iowa online casinos failed. However, the bill is an opportunity to raise awareness and prepare the state for a stronger push in the future.

Currently, only seven states have legal online casinos. Many states (32 and counting) have legalized sports betting, but online casinos have not been as warmly accepted. That could change in the Hawkeye State in the future. But, how can lawmakers and regulators ensure a potential online casino market will succeed? One way would be to learn from the successes of other states, like Michigan.

Revenue from Iowa online casinos could dwarf sportsbooks

Iowa online casinos have the potential to generate more play from consumers and result in far more tax revenue than online sportsbooks. Michigan’s online casino market proves that.

In 2022, total adjusted gross receipts from online casino play in Michigan was over $1.4 billion. Yep, that’s with a “B.” Meanwhile, online sports betting in Michigan generated $219 million. The state received $289.2 million in taxes from online casino operators, compared to $13.7 million from sports betting.

Why the staggering difference? Because sportsbooks lose bets far more often, and they have a much higher cost of acquiring and keeping customers. In 2022, online casinos and iGaming in Michigan paid $70 million more in taxes than online sports betting apps combined for adjusted gross revenue.

Online casino gaming keeps going up, up, and up

In June for example, online casinos in Michigan generated $151 million in revenue, compared to only $18 million for sportsbooks in that state. It marked the fourth consecutive month that Michigan online casino apps produced at least $150 million.

Those numbers in June represent a 41% increase in adjusted gross revenue from online gambling in Michigan for the first six months of 2023. Yet, revenue from sportsbooks in Michigan is flattening, and in fact, was down 35% from May to June.

Whereas sports betting can prove to go up and down based on the seasons (big spike in September when football starts, for example), online casino play tends to be more steady. Folks love to play online slots or poker any time of the year.  And online casino play is immune to the hot streaks or cold stretches of the local teams. It wouldn’t matter if the Iowa Hawkeyes are having a bad season, you can still play Iowa online slots and have fun.

Top online casino games would be available in Iowa

Michigan online casino apps are consistently adding new titles to their roster of games. If we know one thing about casino customers, they are loyal to the popular games they love most. Every year, gaming companies publish new titles which often become the hot new title that players seek when visiting a casino.

If Iowa online casinos come to the state, consumers would be able to play those games (like fun slots or even table casino-style games) before going out to a casino.

One of the nice benefits of online casinos is the ability for people to practice games using an online casino app such as live dealer games. Once they understand the rules, they may feel confident to go to a casino and play the same game.

Iowa online casinos don’t have to harm retail casino revenue

Legal online casinos launched in Michigan in 2021. But the introduction of online casinos has not resulted in a measurable reduction in play at real casinos. In fact, growth continues.

In that first year with online casinos, retail casinos in Detroit reported $1.2 billion in adjusted gross revenue. So far in 2023, the same three casinos are on pace for $1.28 billion. Statewide the trend continues: actual casinos are rebounding from the dip that occurred in 2020 when the pandemic closed their doors. Their figures are back at or exceeding what they were before online casinos were in the picture. Iowa would be able to see the same benefit and in fact, recover losses from neighboring Nebraska.

Online casinos promote responsible gambling

While Iowa has yet to produce an online casino bill that’s survived long enough to become a law, we can make some guesses as to how the state may proceed.

In Michigan, the Gaming Control Board regulates both brick-and-mortar and online casinos. Indeed, that department also regulates sportsbooks, both retail and online. As a result, regulatory oversight is consistent, including the all-important responsible gambling programs,

Online casino games are mandated to provide access to responsible gaming, just as retail casinos are. Consumers in Iowa, just as in Michigan, will receive messages to inform them of the 1-800 numbers and gambling addiction and treatment services.

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Dan Holmes

Dan Holmes writes about sports betting, sports media, and sports betting legislative matters. He's the author of three books, and previously reported for Major League Baseball, as well as the National Baseball Hall of Fame and Museum.

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