Posted on: April 8, 2022, 04:42h.
Last updated on: April 8, 2022, 04:42h.
The State of Michigan will join the Multi-State Gaming Agreement (MSIGA), providing regulated online poker in the US with a real shot in the arm.
The state will shortly join New Jersey, Nevada, and Delaware in sharing poker liquidity, adding its population of 10 million to the potential pool of players. Michigan is the most populous state to join MSIGA so far. Its entry will increase the potential player liquidity by 78%. New Jersey, Nevada and Delaware have combined populations of around 12.8 million.
Why is all this important? Online poker relies on a critical mass of players to thrive. The bigger the player pool, the bigger the tournament prize pools and choice of games and stakes available. This, in turn, attracts more players.
When New Jersey, Nevada, and Delaware opted to legalized and regulate online poker in 2013, they were essentially ring-fenced markets, with play restricted only to players within their borders.
With limited player pools, the new markets struggled. That was particularly true of Delaware, whose population of just under 1 million was unable to sustain a viable online poker ecosystem.
This reporter recalls logging onto to an online poker site in Delaware in early 2014 and barely finding enough players to scrape together one six-handed sit and go.
In February of that year, Nevada and Delaware formed MSIGA, a compact agreement that allowed them to share their online poker traffic. New Jersey joined the club in 2017.
Hopes were high that Pennsylvania (population 12.8 million) would join MSIGA after the state launched online poker in 2018. But a surprise move by the US Department of justice threw a monkey wrench in the works.
New Jersey, Nevada, and Delaware were emboldened to launch online poker and other digital gaming products by a DOJ opinion, issued in 2011. This said that the 1961 federal Wire Act only prohibited the use of “a wire” for the interstate transmission of sports bets, and not other forms of gambling, like online poker.
But in late 2018, the Trump admission reversed that opinion, arguing the Wire Act pertained to all forms of gambling across state lines. This appeared to make MSIGA illegal.
DOJ Drops Case
The New Hampshire Lottery sued the DOJ, arguing the new interpretation criminalized its operations and infringed on states’ rights. The courts agreed with the lottery but did not set the opinion aside.
The Biden administration declined to pursue the case in the Supreme Court, effectively reverting to the 2011 opinion.
Pennsylvania is still playing it safe, though, and has not applied to join MSIGA.
Michigan, which launched online poker last year, has been bolder. Regulators in New Jersey, Nevada, and Delaware issued a joint statement this week that the state had received the all-clear to join the compact.
Currently the only site to pool traffic through MSIGA is WSOP.com, but the impending liquidity injection could tempt other sites to enter the fray.