Analysis

Casino closures in Michigan; more sports betting pressure?

The closure of land-based casinos across Michigan will bring pressure from operators in the state waiting on sports betting and online gaming approval.

The shuttering of the commercial and tribal casinos in Michigan as the second wave of the Covid-19 virus continues to surge might give even more impetus to the state’s sports betting and online gaming legislation.

The closure order came from Gov. Gretchen Whitmer on Sunday. The announcement came after a significant uptick in both cases and hospitalizations.

The restrictions come into force today, Wednesday.

Speed up on sports

There had been speculation previously that the casino closures earlier this year might speed up the process of regulating both sports betting and online gaming in the state.

The Michigan Gaming Control Board (MGCB) has already stated that it hopes the new regime will be open earlier than planned. The potential is there for sports betting and online gaming to be allowed before the end of the year.

The measures currently sit with the legislature’s Joint Committee on Administrative Rules. It has 15 session days to either act on the rules or send them back to the MGCB. 

At the time of writing it has less than 10 days left, according to reports.

The move to introduce sports betting and online gaming in Michigan will dramatically improve the state’s gaming-friendliness. According to the Wedge Index, it will move from T13th to well within the top five.

How the new closures will affect the decision is unknown. CDC Gaming Reports quotes Deutsche Bank analyst Carlo Santarelli as saying it would be “unrealistic to assume this is the last of the closures”. 

Similar sentiments came from Chris Grove, a financial analyst with Eilers & Krejcik Gaming. He told the Las Vegas Review Journal

“It is hard to imagine a world in which we don’t see more restrictive operating environments for U.S. retail casinos across the next two quarters.

“The only questions are how restrictive the measures will be and what specific form those measures will take.”

Second time around

Michigan’s casinos were closed during the first wave of Covid-19 in late March. They opened again in May along with much of the rest of the US gaming sector.

Santarelli suggested Michigan was a regional gaming bellwether. The second virus closure was a “reminder of the risks inherent right now in the group”.

With more casino closures likely, enabling remote registration for online accounts has become even more important.

In neighbouring Illinois Governor JB Pritzker has extended the measure until 12 December as he warned of another stay-at-home order.

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Scott Longley

Scott Longley has been a journalist since the early noughties covering personal finance, sport and the gambling industry. He has worked for a number of publications including Investor's Week, Bloomberg Money, Football First, EGR and GamblingCompliance.com. He now writes for online and print titles across a wide range of sectors.

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