Gambling News

Michigan Rushes to Launch iGaming Amid Coronavirus Closures

Back on March 11, state representative Brandt Iden (R-61) proudly placed the first legal sports bet in Michigan history at the MGM Grand Detroit casino—But in the wake of pandemic-related closures, Michigan rushes to launch iGaming.

The state timed its sports betting launch to take full advantage of the NCAA college basketball “March Madness” tournaments – traditionally one of the most lucrative seasons for bookmakers.

One day later, however, and the NCAA made an unprecedented decision to cancel its National Championship tournaments in light of the ongoing coronavirus outbreak.

Within the week, Governor Gretchen Whitmer (D) ordered all casinos in the Wolverine State to shut their doors as part of a plan to stem the spread of coronavirus.

Just like that, Michigan’s multibillion-dollar gaming industry – one which Iden worked diligently to supplement with sports betting and online / mobile gambling over the last five years – went up in smoke.

mgm grand casino in detroit, michigan rushes to launch igaming

The MGM Grand Casino in Detroit, where the first legal sportsbet in Detroit was made. Unfortunately, COVID-19 led to closures state-wide, including the casino.

 

State Suffers Steep Economic Hit with Casinos Closed

Per revenue and tax figures released by the Michigan Gaming Control Board (MGCB), casino closures prompted by the coronavirus crisis have already cost the state several millions of dollars. Specifically, the state’s three commercial casinos in Detroit have seen revenue fall by 39.2 percent year-on-year, while the state has collected $15.6 million fewer tax dollars over the first quarter of 2020.

In the Motor City itself, the loss of land-based casino gambling has led to a $23 million tax revenue shortfall over the same four-month period.

In December, Iden successfully guided a comprehensive gambling expansion package – One which includes both brick and mortar and online / mobile sports betting, along with online / mobile casino and poker – to passage at long last. One year earlier, Iden had his bill unexpectedly vetoed by outgoing Governor Rick Snyder (R) in one of the latter’s last acts in office.

In doing so, the longtime champion of local gambling rights told colleagues that a mature sports betting market would produce nearly $100 million in tax and licensing revenue, while iGaming would bring in between $30-$50 million.

Regulators Invite Prospective iGaming Operators to Apply for License

With the executive order issued by Whitmer still in effect through at least May 28, the MGCB is taking a proactive approach to launching its iGaming industry as early as possible.

On May 15, the agency published a website under the heading “Internet Gaming and Fantasy Contests” which includes forms and information iGaming operators must submit as part of the licensing process.

In a statement issued to local media outlets, MGCB executive director Richard S. Kalm confirmed that the iGaming launch timeline has been expedited:

“We’ve taken another step toward the launch of online gaming by beginning the licensing process.

The MGCB encourages suppliers to file applications soon so we can conduct investigations and issue provisional licenses, which are allowed under state law. We continue to make progress on rule promulgation for internet gaming and online sports betting.

While we expect to launch these forms of betting by early 2021, we hope it can happen sooner.”

In an interview with SportsHandle, MGCB communications specialist Mary Kay Bean also invited iGaming platform providers to submit the necessary paperwork as soon as possible:

“The MGCB’s Enterprise Licensing and Investigations sections will work cooperatively to review applications and conduct background investigations for online gaming applicants.

The agency has encouraged suppliers who will support the operators and platform providers to apply as soon as they can so we can conduct reviews and prepare to issue provisional licenses.”

Based on preexisting relationships between the three Detroit casinos, MGM Grand Detroit would operate iGaming under its BetMGM brand, MotorCity Casino would partner with FanDuel and Greektown Casino would co-opt partner Penn National Gaming to use the latter’s Barstool brand.

As Michigan rushes to launch iGaming, and casino closures result in big revenue losses, right now it seems likely online sports betting and casino games will be available for state residents as soon as possible.