As of last Friday, PokerStars is active in the state of Michigan, its third state. So far, evidence suggests that the rollout has been just as successful as it was in Pennsylvania, where PokerStars, also that state’s lone regulated poker site, launched in late 2019.
In 2020 in Pennsylvania, PokerStars reported more than $35.8 million in revenue, in what was effectively year No. 1 for the market. Additional poker platforms are expected to launch in the Keystone State, but for now the show belongs to PokerStars.
With more than 12.78 million people in Pennsylvania, PokerStars was able to generate about $2.80 in rake per resident in 2020. Obviously not every resident can play, as you have to be 21 and older. That’s the same situation in Michigan.
If PokerStars Michigan can generate about $2.80 in rake per resident in 2021, that would put its estimated 2021 rake at just under $28 million. Michigan has more than 9.96 million people.
That would translate to average monthly rake of more than $2.3 million for 2021.
Population matters, but MI could surprise people
Regulated online poker is still a relatively new vertical in the nascent U.S. online gambling market. Only Nevada, New Jersey, Delaware, Pennsylvania, and now Michigan have regulated online poker. There isn’t a lot of information to indicate how a new state will fare.
It is possible, despite a significantly smaller population, that Michiganders might play more poker and generate more rake than projected for PokerStars.
Still, Michigan is also home to online casinos and online/mobile sportsbooks, so Flutter Entertainment, the parent company of PokerStars that also owns the FanDuel Sportsbook and FanDuel Casino, will look to build the player bases across multiple verticals.
In other words, there likely won’t be a significant difference in how Flutter markets poker between Michigan and Pennsylvania. PokerStars Michigan is planning to soon announce dates for a special tournament series — dubbed MICOOP — for Michiganders, similar to what it does in Pennsylvaina.
The gap between the Pennsylvania online poker market and the one in Michigan could be tighter than the populations suggest, but there appears to be very little chance Michigan will provide more rake for PokerStars than its platform in the Keystone State, at least anytime soon.
The competition between the state markets is a superficial one, as it’s expected that Michigan and Pennsylvania (along with New Jersey) will pursue a liquidity-sharing arrangement so players on PokerStars in one state can play directly against those in another state.
PokerStars would pay taxes on the rake to both states.
The benefits of liquidity sharing could be immense. More robust cash game options and larger tournament prize pools across multiple jurisdictions would more than likely grow rake in each individual jurisdiction. Online poker thrives with a network effect.
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