Exactly ten years ago, the landscape of online poker in the US underwent a significant transformation as the doors to legalized online gambling were opened. However, what followed has been a tale of measured progress, marked by the slow expansion of this beloved card game across the nation.
Today, only a handful of states have embraced online poker, with merely five out of eight actively regulating it. Among these regulated states, only four have taken the audacious step of forming multi-state online poker compacts.
In this long series, we dive into the major developments that could mark a significant leap forward for the US online poker industry — developments that are on the horizon but have yet to materialize. We also assess the likelihood of these events occurring within the next year or so.
- What It Is: Sharing liquidity across their Michigan and New Jersey player pools in one unified network.
- Why It Matters: Bigger prize pools in tournaments, increasing the variety of games and increased competition.
- Who Benefits: Everyone — players, operators and regulators.
- Who Has Done It Thus Far: PokerStars US
- Who Hasn’t: WSOP US & BetMGM Poker US
- Why They Haven’t Done It Yet: Likely technical and regulatory challenges.
- Likelihood of It Happening in 2024: 4.5/5
What Needs to Happen
More operators — WSOP and BetMGM Poker — need to connect their New Jersey and Michigan player pools.
In May 2022, Michigan officially joined the Multi-State Internet Gaming Agreement (MSIGA), an interstate online poker compact established a decade ago. Nevada and Delaware became the inaugural signatories in 2013, followed by New Jersey in 2017.
Michigan’s entry into the multi-state online poker compact marks a significant milestone for the struggling US online poker industry, which has faced challenges recently primarily because of a lack of liquidity, particularly in states like Pennsylvania.
This development is viewed as the initial spark in a series of events that could see more operators and states utilizing the opportunity to share liquidity thanks to the compact.
However, thus far, only PokerStars has capitalized on this opportunity. On January 1, 2023, PokerStars combined its Michigan and New Jersey player pools, becoming the second operator in the US to introduce a shared liquidity network.
However, two notable operators, WSOP and BetMGM, which maintain a strong presence in both New Jersey and Michigan, have yet to seize the advantages presented by this compact. If these operators follow in the footsteps of PokerStars, it would undoubtedly inject much-needed vitality into an industry that is in dire need of fresh investment and innovation.
Why Is it Important?
The merger of real money online poker in Michigan and New Jersey holds paramount importance for the future of US online poker. Pooling players from multiple jurisdictions (often termed “shared liquidity”) signifies that players get to compete at the same cash games and tournaments with other states that have entered into a shared liquidity agreement.
The benefits of shared liquidity are far-reaching. It broadens the spectrum of available poker games and ushers in bigger tournament prize pools. This expanded player base is a crucial factor for the success of online poker, which is highly dependent on larger liquidity, akin to how multi-state lotteries thrive on increased participation.
With larger player pools, online poker can rekindle its competitive spirit and draw in more players. Increased player participation means more revenues for operators and regulators, which in turn can be reinvested in the industry.
As highlighted above, the advantages of a shared liquidity agreement extend to everyone involved in the online poker ecosystem – players, regulators, and operators.
- Players: A larger player pool results in increased game variety, bigger prizes, enticing promotions, and increased competition, which in turn leads to the player experience becoming more engaging, vibrant, and enjoyable.
- Operators: Shared liquidity allows operators to tap into new markets, attracting players from different states and thus target a broader audience. It also creates more revenues, allowing operators to enhance their offerings and create a more dynamic and rewarding poker environment.
- Regulators: With bigger player pools and prizes, regulators have a larger player base to monitor and tax, which can help increase revenue for the state.
Why Hasn’t It Happened Yet?
This is a question that has lingered in the minds of poker enthusiasts for some time: Why hasn’t WSOP or BetMGM created a shared liquidity network that includes Michigan?
The reasons for the delay are not entirely clear — we think that technical and regulatory challenges could be among the primary roadblocks.
Merging two player pools from different states necessitates substantial behind-the-scenes work. Michigan, before officially becoming part of the interstate online poker compact, published a comprehensive guidance document outlining the steps that operators and platform providers must take to facilitate multijurisdictional poker.
While crucial for ensuring the smooth integration of player pools, this detailed process could have proven to be quite demanding and time-consuming for both operators.
For BetMGM, this delay could also be attributed to other business and regulatory priorities taking precedence over poker. Poker might be a relatively minor part of the operator’s overall business, leading to its deprioritization in favor of other, more lucrative ventures.
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The WSOP real money platform, on the other hand, faces the added complexity of its partnership with 888, which could be contributing to the delay. In Michigan, WSOP uses 888’s next-generation software, while in New Jersey and Nevada, the software is based on 888’s older version. Upgrading the older platforms is necessary before merging Michigan into its existing tri-state shared network, and this process may have hit a roadblock.
This roadblock could be attributed to WSOP’s expanding partnership with GGPoker in North America and globally. It is plausible that WSOP is postponing significant software changes until its current deal with 888poker concludes, possibly to transition to GGPoker’s software. The fact that WSOP’s operations in Ontario already utilize GGPoker’s software suggests this transition could become a real possibility.
When Will it Happen?
The burning question remains: When will WSOP & BetMGM merge their Michigan player pools into a shared liquidity network? Predicting the exact timeline is challenging. Despite numerous attempts to glean information, both operators have remained tight-lipped about their shared liquidity plans.
PokerStars’ sustained growth in Michigan and New Jersey, thanks to the launch of a shared liquidity network earlier this year, may prompt WSOP and BetMGM to expedite their merger plans.
For BetMGM, combining its Michigan and New Jersey player pools could offer a compelling reason to enter the real money online poker Nevada market where it already holds a license and launch a tri-state shared liquidity network.
In the case of WSOP, if the merger were to happen today, the addition of the Michigan player pool would significantly bolster its existing network, forming the country’s first quad-state network (NV+DE+NJ+MI).
However, a recent development casts a shadow of uncertainty over the WSOP/888 network. The exclusive vendor contract for igaming, including online poker in Delaware, was relinquished by the Delaware Lottery, replacing 888 with Run It Once Poker’s parent company, Rush Street Interactive (RSI). This shift could potentially deprive the WSOP/888 network of access to the Delaware online poker market.
Nevertheless, including the MI player pool in WSOP’s existing tri-state shared liquidity network would put it in an advantageous position over other operators as it remains the sole player with a presence in the state of Nevada.
Interestingly, BetMGM appears to be better poised for this development than WSOP. In November of the previous year, BetMGM upgraded its New Jersey client to align with its Michigan offering, hinting at preparations for a shared liquidity launch. However, that has been pending since.
WSOP, on the other hand, would need to upgrade its software in New Jersey and Nevada to align with its Michigan offering.
Our forecast places the likelihood of this merger becoming a reality in 2024. Given the potential benefits and the industry’s evolving landscape, It would be rather surprising if neither of the operators decides to integrate Michigan into their networks by the upcoming year.