Just weeks after online poker was signed into law in Michigan, The Stars Group, parent company of online poker giant PokerStars, has announced a partnership with the Little Traverse Bay Bands of Odawa Indians Gaming Authority to offer online gaming in the state.
The deal will provide TSG with first skin access to operate real-money online poker, casino games and sports betting in the state when the market launches. Under the terms of the deal and subject to approval by state gaming regulators, TSG will be allowed to offer its popular igaming brands in Michigan, including PokerStars for poker and FOX Bet for sports betting.
“We are excited to announce this agreement with the Odawa tribe, which further strengthens our market access as we work to continue to build our FOX Bet business into one of the leaders in the emerging U.S. online betting and gaming market,” said Robin Chhabra, Chief Executive Officer, FOX Bet, in a press release issued Monday.
The Odawa tribe, which operates casinos in Mackinaw City and Petoskey, will receive an undisclosed percentage of the revenue generated by TSG through its online gaming products.
“The Tribe’s partnership with The Stars Group extends beyond our reservation and places the thrill of world class sports betting and online gaming under every finger-tip sliding across a touch screen in the State of Michigan,” said Fred Harrington Jr., Tribal Council, LTBB Odawa.
PokerStars’ Other Deal in Michigan
Last year, TSG entered a partnership with land-based casino company Penn National Gaming (PNG) as a means of increasing its online gaming market access. The 20-year PNG deal provides TSG options to offer online gaming in nine states where PNG owns or operates land-based casino facilities subject to legalization of igaming, including Michigan, in exchange for a share of the revenue, a $12.5 million cash payment and other assorted bonuses and fees.
However, under the terms of the deal, TSG received first skin options in only four of the nine states. In the other five states (including Michigan), TSG’s options are only executable if the law allows multiple skins or brands for online gaming.
The law in Michigan allows for multiple brands, but it limits their use to a single brand for online poker and an additional brand for online casino games. This provision of the Michigan law could have left TSG shutout of the state under the PNG deal and was likely a motivating factor for TSG to strike a new deal for online gaming access in the state.
The Future of a PokerStars US Network
The only multistate online poker network operating in the US currently is the All American Poker Network (AAPN), which hosts online poker games in New Jersey, Nevada and Delaware under various brands including WSOP and 888.
While the idea of a PokerStars online poker network spanning multiple states has not yet come to fruition.
PokerStars operates in just two US states—New Jersey and Pennsylvania, but just New Jersey permits its online poker operators to share liquidity with other states that have legalized online poker. For now, PokerStars does not currently operate in the other states that have legalized online poker—Nevada, Delaware and West Virginia—limiting its ability to form a US network.
Part of the reason PokerStars NJ and PokerStars PA remain segregated is because the US Department of Justice is using the 1961 Wire Act to oppose cross-border liquidity sharing, a position that has deterred Pennsylvania gaming regulators from allowing shared liquidity.
So, unless the DOJ abandons its opposition to cross-border internet gaming or the case is decided in favor of the online gaming industry by the US Supreme Court, a PokerStars US network is unlikely even when online poker comes online in Michigan.