Michigan scores at or near the top of the gambling industry when it comes to addressing two of the sector’s biggest fears: cannibalization and illegal gambling.
Both have been taking up many of the headlines in the gambling space as of late, especially in Michigan.
Recently, National Council of Legislators from Gaming States President, Shawn Fluharty, spoke about the fear of online casinos hurting the health of retail casinos (cannibalization) and the rising concern of illegal gambling.
Both retail and Michigan online casinos have proven they can coexist.
And, the Michigan Gaming Control Board is making a concerted effort in cracking down on illegal gambling.
Cannibalization a non-issue for Michigan gambling market
Michigan’s online casinos and its three Detroit retail properties have each been successful since the launch of iGaming in 2021.
While online casinos have exploded in the Great Lakes State, averaging $185 million through the first two months of 2024, Detroit retail casinos are holding their own, too.
The three locations, Hollywood Casino at Greektown, MotorCity Casino and MGM Grand Resorts, are averaging nearly $107 million a month. That’s up from monthly averages of $101.9 million in 2023 and $104.7 million in 2022.
Many states are currently struggling with the idea of passing online casino legislation because of the cannibalization factor. States such as Michigan and Pennsylvania did not fear cannibalization and created markets where both verticals could flourish.
“Regarding cannibalization, current iGaming states didn’t have the cannibalization talking point when considering legislation,” Fluharty told SBCAmericas. “Brick-and-mortar casinos continue to run strong in those states.
Other states could take look at Michigan as a guide for how both online and retail casinos can experience success.
Fluharty spoke about the importance of collaboration.
“Collaboration is the most important issue that deserves more attention when considering legislation,” Fluharty said. “When we were passing iGaming (and sports betting) in West Virginia, we reached out to David Rebuck and New Jersey. We worked with our regulators, West Virginia Lottery, to get legislation across the finish line. Without that collaboration, it doesn’t happen.”
Removal of illegal gambling should be a point of emphasis
Fluharty, who plays a prominent role in the gambling space, addressed the issue of illegal gambling in the marketplace. It has been an issue for the regulated industry.
Instead of being focused on cannibalizing retail casinos, Fluharty thinks lawmakers need to turn their attention to the ever-growing illegal market.
“Lawmakers should be focusing on cannibalizing the black market… At the end of the day, lawmakers have the opportunity to raise new revenue without raising taxes, shrink the black market and provide consumer protections which currently do not exist,” he said.
“Those are sound policy objectives, not just political talking points.”
The MGCB has, in essence, followed Fluharty’s directions to a tee. The board has taken illegal gambling extremely seriously.
Earlier this month, it announced the removal of 167 illicit wagering devices and sent letters to 64 businesses across the state demanding to shut down illegal gambling operations.
MGCB Executive Director Henry Williams addressed the seriousness of the matter and praised the public for playing a key role in keeping the integrity of gambling.
“Thanks to the vigilant supervision of the Michigan Gaming Control Board, last year agency personnel were able to target and disrupt several instances of illegal gambling activities that undermined the integrity of our legitimate, regulated gaming industry,” Williams said in a statement. “With a commitment to maintaining fairness, transparency, and public trust, these proactive efforts were undertaken – thanks to many tips from concerned Michigan citizens — to ensure safe, regulated gambling environments.
“I encourage the public to please keep the tips coming, as we take each one very seriously.”
Michigan is on the right path when it comes to gambling, as the market is booming in all categories.
