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A Strong Start For PokerStars Michigan, But How Long Will It Last?

The somewhat unexpected launch of PokerStars Michigan makes the Wolverine State the third state of consequence with legal online poker in the US. Thus far, the Michigan online poker market has followed its predecessors, as it’s off to a fast start.

According to PokerFuse.com, PokerStars Michigan is the largest online poker site (based on traffic) in the legal US market. It’s bigger than PokerStars Pennsylvania (like Michigan, a monopoly). It’s bigger than any New Jersey network or the combined New Jersey player base. It’s bigger than 888s multi-state network that pools players in Nevada, Delaware, and New Jersey.   

Not as Surprising as it Sounds

On the surface, that sounds like an exciting development, but if we pull back the curtain and examine the different US online poker markets, Michigan’s ascent to the top isn’t a surprise at all and will likely be short-lived.

The reason being, online poker launches in the US are like sprinters running marathons. They come out of the box at full speed but slow down very quickly.

The chart below from a column at Betting USA in early 2020 shows the first four months to avoid running into the COVID-19 increases, but over time, New Jersey’s online poker revenue fell below $2 million per month.

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Delaware and New Jersey launched in late-November 2013, so the chart above starts in December. Pennsylvania’s Month 1 in the chart is November 2019, since its online poker industry launched on November 4.

Explaining Michigan Online Poker’s Fast Start

To better understand how Michigan sits atop the online poker traffic rankings, it’s important to understand each market.

PokerStars has monopolies in Pennsylvania and Michigan but is one of three New Jersey networks: 888-WSOP.com, PokerStars, and Party Poker.

The other two online states, Nevada and Delaware, are also monopolies, with 888 being the sole online poker operator in those locales.

Second, New Jersey, Nevada, and Delaware allow operators to pool players, which means 888-WSOP.com can pool players since it’s the only operator in Nevada and New Jersey. That provides the network with an advantage over its competitors in New Jersey.

The simplest way to think about this is:

  • Pennsylvania (population 13 million) is PokerStars country.
  • Michigan (population 10 million) is PokerStars country.
  • New Jersey (population 9 million) is a three-piece pie, with 888 getting a boost from its association with two smaller states (combined population 4 million).

Here’s how that shakes out in terms of traffic.

Michigan vs. WSOP.com/888

The 888-WSOP.com network is the only interstate online poker network in the US, thanks to 888’s monopolies in Nevada and Delaware. That gives it a leg up on its peers in New Jersey, but those competitors do exist and cut into 888s New Jersey traffic numbers.

As such, the network falls well short of PokerStars’ numbers in both Pennsylvania and Michigan.

Michigan vs. New Jersey

Michigan has a slightly larger population than New Jersey, and with three operators divvying up in traffic in the Garden State, this is a no contest, despite New jersey’s reputation as a poker state.

Michigan vs. Pennsylvania

Conversely, Michigan has a significantly smaller population than Pennsylvania, and the market dynamics are identical, with PokerStars being the sole operator. So how is Michigan beating Pennsylvania? Simple, outside of a COVID-like event, online poker markets tend to peak in the first couple of months. So, while Pennsylvania’s online poker market is on the downslope, Michigan is approaching its apex.

Why Michigan’s #1 Ranking Won’t Last

Michigan won’t escape this trend. The fast start will fade, and it will fall behind Pennsylvania in terms of traffic in short order. 

As noted in the previously mentioned Betting USA column, there are likely several reasons US online poker markets jump out to a fast start before fading:

Customers realize this is not the global online poker product they remember and lose interest.

The game of online poker has evolved to a point where casual players lose at a faster rate. That has the added negative effect of making the game more boring to players looking to gamble.

New customers are more likely to be overwhelmed with the online poker lobbies of 2020 compared to the more streamlined lobbies of 2005 or even 2011. Simplicity has gone out the window in favor of features and filters and a game type for everyone.

The reality of regulation is fewer rewards and promotions, so the flood of free-cash and free-play that players received during the poker boom doesn’t exist in Pennsylvania or New Jersey.

And as I’ve said many times in the past, during the poker boom there were far fewer online time sinks than there are today. Streaming services were in their infancy, mobile apps and Twitch didn’t exist, and social media, podcasts, and vlogs weren’t the mega-industries they are today.

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