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Good things are starting to happen for regulated online poker in the US as two positive developments emerged this month.
Michigan which recently launched regulated online gambling passed the interstate online poker bill into law, permitting cross-border liquidity sharing with other states within the US.
But even more importantly, the United States Court of Appeals for the First Circuit issued a favorable decision in favor of the New Hampshire Lottery Commission (NHLC), rejecting the Trump administration’s Wire Act 2018 reinterpretation prohibiting online poker and other forms of internet-based gambling that cross state lines.
This re-opens the door for multijurisdictional online poker in the US that had been jeopardized by the 2018 reinterpretation of the Wire Act and even caused the state of Pennsylvania to delay the launch of its online gaming market in 2019.
Both developments are crucial for the future of US online poker. Combining player pools from multiple jurisdictions (commonly referred to as “shared liquidity”) means that players get to compete at the same cash games and tournaments with other states that have come into a shared liquidity agreement.
This allows for a wider game selection and bigger tournament prize pools – something that is vital to the success of online poker which is highly dependent on larger liquidity in a similar way to multi-state lotteries.
Currently, interstate online poker is possible thanks to the Multi State Internet Gaming Agreement (MSIGA) signed between three of the following US states:
Delaware and Nevada were the first two states to enter into an agreement back in 2014. This was put into action the following year in March 2015.
Two years later, the state of New Jersey joined the agreement in October 2017 and in late April 2018, WSOP.comsuccessfully connected its New Jersey player pool with its existing Nevada/Delaware player pool – the only network in the US to take advantage of this agreement.
The tri-state shared liquidity propelled the WSOP.com/888 network to the top spot in the market. As a result, revenues for Caesars, the parent company of WSOP, have more than doubled.
With the Wire Actout of the picture, Pennsylvania, who was expected to join the MSIGA previously, will once again look to get in touch with its neighboring New Jersey regulators.
And with Michigan passing the interstate online poker bill, it is now a good time to take a look at how shared liquidity will impact the US regulated online poker market should more US states join the interstate agreement.
What if Pennsylvania Allows Interstate Online Poker?
Clearly, PokerStars would be the biggest beneficiary if Pennsylvania allows shared liquidity as it is the only operator currently operating in the Keystone State. The agreement would allow the operator to merge PokerStars NJ and PokerStars PA into one player pool.
Based on cash game data available on PRO Data, tracked by independent industry monitor, GameIntel, PokerStars Pennsylvania currently averages 400 concurrent cash game players and PokerStars New Jersey averages over 130 players.
Both combined, there would be close to 530 seats occupied which would be 1.7 times the cash game traffic of the WSOP/888 network.
|partypoker US Network||100||Expected ~120||220|
|WSOP/888||310 (Nevada and Delaware include)||Expected ~150||460|
Increased traffic would allow PokerStars to offer games that are currently not feasible with a stand-alone network. Game formats such as Spin & Go (lottery-style Sit & Go) and Zoom (fast-forward) that require greater liquidity would likely be introduced.
Tournament guaranteed prize pools would naturally get boosted by at least 1.5 times and the Sit N Go games would fill up faster.
The increased traffic would also feed into making the Pennsylvania online poker market more attractive in the following ways:
- Attracting other operators such as WSOP/888 and the partypoker US network that already have a presence in New Jersey and other states that joined the interstate agreement
- Providing more options for the players as a result of new operators going live in the market
- Increasing revenues for both operators and state regulators
- Increasing value for players as operators would offer bigger promotional giveaways
- If WSOP enters Pennsylvania, players will have a chance to win a WSOP bracelet from the comfort of their homes
What if Michigan Joins the US Shared Liquidity Pool?
Although Michigan has passed the multijurisdictional online poker bill into law, it will likely be months before combined player pools become a reality in the Wolverine State.
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In fact, Michigan Gaming Control Board Executive Director Richard Kalm did indicate that talks with New Jersey regulators are already underway, but he believes operators in Michigan will not be able to combine their player pools with those in other states until the end of 2021 at the earliest.
Once that happens, the Michigan online poker market will likely thrive, unlike the Pennsylvania market which had a slow start with only one operator willing to launch within its first year.
Michigan has a population of nearly 10 million people which is bigger than New Jersey’s (9 million) population but less populated than Pennsylvania (13 million).
Based on population data, the Michigan online poker market will likely see cash game traffic of 300 to 500 concurrent players at the time of launch depending on the number of operators that go live.
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Adding this figure to the present cash game of traffic of the New Jersey online poker market, which currently averages over 500 seats, would create a player pool with around 800 to 1000 concurrently occupied seats making it an extremely attractive market.
The effect on game offerings would be similar to what would be expected in Pennsylvania: Tournament prize pools would be boosted, seats would fill up faster, and games would run more frequently even in non-peak hours.
As of now, only PokerStars MI and partypoker MI have been included in the first batch of approved igaming operators by the MGCB. Although 888 MI and WSOP MI are likely farther off because the network’s parent company has yet to submit an application for a license in Michigan, the duo has recently indicated it intends to aggressively expand its multi-state online poker network in 2021.
If Both Pennsylvania and Michigan Join the US Shared Liquidity Pool
For the US to become the global epicenter for online poker, for starters, both Pennsylvania and Michigan would need to join the shared liquidity agreement.
This would not only double or triple the traffic, but revenues would also flourish which in turn would influence other big states such as New York (20 million population) and California (40 million) to regulate online poker.
Even smaller states such as West Virginia and Colorado which lack the population to support an online poker market of their own would likely make moves to launch online poker and join the shared liquidity agreement.
|partypoker US Network||100||Expected ~120||Expected ~90||310|
|WSOP/888||310||Expected ~150||Expected ~100||560|
The approval of shared liquidity by state regulators would also pave the way for other operators to prioritize launching online poker in the states where regulated online poker is available.
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Partypoker’s parent company which has been approved to offer online poker in Nevada could go live and connect its player pool with its existing network in New Jersey.
Online casino-focused operators such as BetRivers, Parx, IGT, and Pala may also be attracted to launch online poker in these states.
Still, there is a long way to go. But first, it is crucial that Pennsylvania joins the multi-state agreement and Michigan does the same soon after its online poker market goes live.