Let $\mathfrak{M}_g$ denote the moduli stack of Riemann surfaces of genus $g$, it is a smooth complex analytic stack, and is the analytic stack underlying $\mathsf{M}_g$, the moduli stack of complex algebraic curves of genus $g$. Alternatively, it is the quotient stack $\mathcal{T}_g // \Gamma_g$ of the mapping class group acting on Teichmuller space (by biholomorphisms).

There are two things we might mean by the Picard group of $\mathfrak{M}_g$, using either holomorphic line bundles or algebraic line bundles. The first is $Pic_{hol} := H^1(\mathfrak{M}_g;\mathcal{O}^\times_{\mathfrak{M}_g})$ and the second is $Pic_{alg} := H^1(\mathsf{M}_g;\mathcal{O}^\times_{\mathsf{M}_g})$. As $\mathfrak{M}_g$ has a finite cover by the quasiprojective variety $\mathfrak{M}_g[3]$ of curves with a level 3 structure, I believe the latter group can also be defined to be the subgroup of $Pic_{hol}$ of those holomorphic line bundles which become algebraic on $\mathfrak{M}_g[3]$. If not, this defines yet another notion of Picard group.

It seems to me that it is $Pic_{alg}$ which is usually discussed, for example in Mumford's paper on Picard groups of moduli problems. Is $Pic_{hol}$ discussed explicitly anywhere? On the other hand, presumably these groups agree (certainly $Pic_{alg} = \mathbb{Z}$ is a summand of $Pic_{hol}$). Is this explicitly stated and proved anywhere?

Any other observations about this distinction are welcome too.

EDIT: As a related question, suppose that one only knew about the analytic object $\mathfrak{M}_g$. Can one directly show that $c_1 : Pic_{hol} \to H^2(\mathfrak{M}_g;\mathbb{Z})$ is injective? (Granted $H^1(\mathfrak{M}_g;\mathbb{Q})=0$, say.)

a priorireason, but the composition $Pic_{alg} \to Pic_{hol} \to H^2(\mathfrak{M}_g;\bZ)$ is known to be an isomorphism, so $Pic_{alg} \to Pic_{hol}$ is indeed injective. – Oscar Randal-Williams Nov 15 '10 at 12:20