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Michigan Retail Sportsbooks to Shut Down as Online Launch Lingers

Michigan Retail Sportsbooks to Shut Down as Online Launch Lingers article feature image

Roy K. Miller/Icon Sportswire via Getty Images. Pictured: Coach Jim Harbaugh and the Michigan football team.

Michigan sports betting took a blow after officials ordered the state’s commercial casinos to close Wednesday and for at least the next three weeks.

While some Native American casinos intend to remain open, the closure of Michigan’s three Detroit commercial casinos hinders the legal market’s potential, especially as the state’s online sportsbook approval lingers in a state legislative committee.

The shutdown order, the latest commercial casino closure in response to the COVID-19 pandemic, shutters sportsbooks in Michigan’s largest metro area. Sports betting is technically still available at retail books on sovereign tribal lands, but the commercial casino closures effectively pause the most convenient source of legal wagering in the state’s largest metropolitan area.

The brick-and-mortar closures come as Michigan online sports betting — as well as casino gaming and online poker — is not yet allowed to begin.

Online Fate Uncertain

Michigan online gaming is nearing final approval, but it seems increasingly likely it won’t begin until December or January.

Gov. Gretchen Whitmer signed the state’s sweeping gaming bills into law in December 2019, legalizing online sports betting, poker and casino gaming, but all were subject to the state’s lengthy regulatory and rulemaking process. While Midwestern neighbors such as Iowa and Indiana launched online sportsbooks within a few months after their respective governors signed sports betting into law, Michigan has yet to do so nearly a year later.

Online wagering’s fate now rests in the legislature’s Joint Committee on Administrative Rules. A group of state senators and representatives charged with approving state regulations, JCAR has 15 session days to take action on rules set before it, after which the rules are allowed to pass into law. The committee can waive or expedite the process, but has not done so, despite pleas from state gaming officials.

If the committee doesn’t accelerate the process, the 15-session-day time period would expire sometime in December. With the three-week closures set to begin Wednesday, that would mean Michigan would go until at least the second week of December without legal commercial betting options during the midst of the lucrative college and professional betting seasons.

Online sports betting already makes up the lion’s share of sportsbook revenues in markets with both options. In Colorado, a state that is also restricting its commercial casinos, 98% of all legal bets were placed online in September.

Additional Challenges

This uncertainty comes as the end of Michigan’s 2020 legislative session seems in jeopardy.

Rising COVID-19 cases throughout the Midwest have already led to reimposed business restrictions across the region and led Illinois lawmakers to cancel the remainder of their 2020 legislative session. Michigan legislators are set to meet Wednesday, the last scheduled meeting day in November, but the rest of the year’s calendar seems increasingly uncertain.

Without JCAR action, a curtailed or canceled 2020 session could end hopes of legal online wagering this year. Michigan starts a new legislative session in January, and the 15-session-day JCAR mandate would start over, pushing online wagering’s start likely until at least February.

Once JCAR approves the rules, Michigan regulators will still have to individually certify each sportsbook applicant. Though top operators with existing retail books in the state such as DraftKings, FanDuel and BetMGM are already positioned to go live as soon they earn approval, this final bureaucratic step could further delay what has already been a lengthy process.

Any hiccups could push online wagering’s start even further, possibly jeopardizing a go-live date ahead of the Feb. 7 Super Bowl, traditionally the single most lucrative day of the year for American sportsbooks.

What has already been a frustrating year for Michigan’s fledgling sports betting market could carry over to 2021 without quick action by state officials.

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