Iden: Fall Launch Of Michigan Online Gambling Could Hinder Early Market

Rep. Brandt Iden, lead sponsor of the bills that became expanded Michigan gambling laws, agrees with a state regulator who says iGaming and online sports betting could launch this fall.

But speaking on video as part of the ICE North America Digital conference on Monday, the Republican pointed to market issues that could arise from the hastening of the rule-making and licensing processes.

Will the market be ready for fall launch?

Tribal, commercial casinos must be ready too

When Gov. Gretchen Whitmer signed the bills into law in December, an early 2021 launch for online gambling was projected, as casinos made partnerships with online operators to build their platforms.

Many of the agreements built launch timelines for early 2021.

But if the state launches earlier, will anybody be ready?

As Iden reminded viewers on Monday, at least one tribal casino and one of Detroit’s three commercial casinos must be licensed before a launch.

Finding one of each could be a challenge. But if two are ready, is that fair to other casinos? And ultimately, how will that impact consumer options in the short-term?

“You run into a situation where you’re actually going to be at a competitive disadvantage if you’re one of those operators who was taking the time to build out the platform,” Iden said. “And, in fact, they may not foot the investment into Michigan that we originally anticipated.”

Lawmaker says rule-making could wrap this summer

Richard Kalm, executive director of the Michigan Gaming Control Board, said Friday that he thinks a November launch for iGaming and online sports betting is possible.

He said the licensing process is happening concurrently with rule-making.

Iden anticipated the rule-making process to last through most of the summer.

“As we look at licensing, that always takes the longest, even if we can get rules promulgated by the end of July, first part of August, you’re going to see licensing take longer,” he said.

Both Kalm and Iden said provisional licensing could be possible, especially after they were issued to operators in March with the launch of retail sports betting.

Iden favors shared player pools for online poker

When asked about Michigan someday pooling online poker players with other states in shared liquidity, Iden was not optimistic about following the lead of Delaware, Nevada and New Jersey anytime soon.

The representative said he is in favor of it, but said the same forces that sometimes opposed expanded gaming laws are still in play.

“It’s a fight with iLottery,” Iden said. “The administration and our governor believe that those larger jackpots could potentially pull dollars and players from iLottery.

“I disagree with that, I disagree with the premise. However, I believe that will be something that needs to be addressed.

“I think that it makes for more excitement in the marketplace, and I actually think that a rising tide lifts all ships. With those bigger jackpots, I think you’re going to get players that play iGaming, then they’re going to go over, they’re going to do iLottery, they’re going to play on both platforms.

“Unfortunately, that may not end up being the case, but it’s certainly something I’m pushing for. So I hope we see that in Michigan.”

Lottery, iLottery growth encouraging to market

Later though, Iden pointed to iLottery as an example for optimism in seemingly competitive markets such as land-based casinos and online gaming.

Iden pointed to growth in Atlantic City, N.J., as a way that land-based casinos are feeling off online partners and vice versa, citing special offers, enhancements and loyalty rewards as reasons.

In Michigan, the iLottery and retail lottery have benefitted from mutual growth and promotions.

“Our iLottery ties in with our retail lottery all the time,” Iden said. “Cross-marketing, cross-promotions… we actually see we get increased players because of that.

“We think the same thing is going to happen here in Michigan. Once we are up online, the casinos actually probably bring in more foot traffic because of what they’re going to be able to offer to players.”

Iden also said tracking of players online will help detect problem gamblers.

“We can monitor folks better and actually help folks with their addiction issues better online through technology better than we can at the land-based casinos,” he said.

Iden: Despite issues, Michigan should push forward

Iden said because of the market issues that might arise from pushing to a fall launch, consumers could have less options at first.

But the term-limited legislator from southwest Michigan says the state should push for it anyways, in part because of the budget shortfalls from land-based casinos that closed right at the launch of Michigan sports betting.

“I think in the end, it’s important,” Iden said. “it’s a revenue source because even when the land-based casinos open, it will still be at less capacity than what we’ve seen.”