A journey beginning in 2019
Governor Gretchen Whitmer has approved a Michigan bill to legalize interstate online poker compacts. The new legislation will permit players on Michigan’s real-money online poker sites to share tables with players in other states.
Known as SB991, the legislation builds on Michigan’s Lawful Internet Gaming Act (LIGA) of December 2019. It passed through the Senate in October last year by a 389-36 margin, after which the Michigan House of Representatives gave its approval on December 18 with a vote of 85-16. Gov. Whitmer finally signed the online poker legislation into law on December 29. This latest update appeared on the Michigan Legislature website this week.
The bill will come into effect 90 days from the date of approval. Although the legislation permits online poker liquidity sharing, it does not set out any official regulation for doing so. As a result, it is unclear whether compacts will be introduced this year.
Other multi-state compacts
The US poker industry is still in a state of gradual recovery after the introduction of the Unlawful Gambling Enforcement Act in 2006 and Black Friday in 2011. This saw authorities shut down a number of unregulated gambling sites offering games in the US.
Since then, a number of states have been able to set up successful regulated online poker markets. Leading the way in 2012, Delaware became the first state to legalize the activity, followed shortly by Nevada. By 2017, both New Jersey and Pennsylvania had also signed online poker legislation into law.
In order to improve the growth of these markets, legislators looked towards interstate online poker compacts. This allowed online poker sites to benefit from a player pool consisting of traffic outside of state boundaries, subsequently increasing growth. Nevada and Delaware were the first two states to share online poker liquidity in March 2015.
Despite the success of interstate compacts in other states, Michigan officials excluded such legislation from the 2019 online gaming act. This was because of the influence of the Michigan Lottery. Lottery organizers believed they would lose customers if online poker operators could provide larger prize pools for tournaments.
Michigan’s burgeoning online gambling market
Official approval of bill SB991 is just the latest in Michigan governmental support for its online gambling industry. In passing the LIGA in 2019, the state permitted the Michigan Gaming Control Board to issue licenses to internet gaming companies, including poker and casino businesses. Operators are expecting the launch of Michigan’s online gambling market in 2021.
Also in December 2019, Governor Whitmer signed house bills 4916 and 3408, which legalized online sports betting and fantasy sports betting. Through bill 4916, operators already holding a casino license can apply for an online sports betting license. Tribal operators licensed through the National Indian Gaming Commission are also eligible.
Michigan’s first sportsbooks began taking in-person bets in March 2020, while online sports betting will follow in Q1 2021. Online sportsbooks must have agreements with three commercial casinos or 12 licensed Indian tribes. DraftKings, BetMGM, FanDuel, and BetRivers have all established their intent to launch online sports betting apps in Michigan. They are among 15 provisionally licensed online sportsbooks that can launch imminently.