Seven Stories We Expected In 2021, And Two We Didn’t – OnlinePokerReport.com

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2021 was always going to be a complicated year for US online gambling. The industry was a young and dynamic one to begin with, but it also sat at the cusp of several potential turning points.

The transition of power from the Trump administration to Joe Bidens was impending. So too was the opening of the Michigan iGaming market. The COVID-19 pandemic was in full swing, but vaccinations had just started to get underway and restrictions were loosening. Several important legal battles were still unresolved.

Some of whats happened over the past twelve months fell into the category of known unknowns. At the end of 2020, I wrote about seven stories we knew would be unfolding this year.

There have also been a couple of major developments that happened more or less out of the blue. As we prepare to bid farewell to 2021, heres a look back at the years big stories, starting with those we were following from the start.

2020 ended on a cliffhanger for Flutter. Its acquisition of PokerStars had been fraught with risk due to the massive fine levied against it in Kentucky. Having won its appeal, it may have thought itself in the clear. However, in the dying weeks of the year, the states Supreme Court reinstated the judgment.

Not only that, it added substantial interest to the fine, bringing the total to more than $1.2 billion. The company promised its shareholders that it would fight on, but it wasnt clear what legal footing it had to do so.

First, it tried unsuccessfully to get a rehearing. Next, it went to the US Supreme Court. Normally, SCOTUS wouldnt involve itself in matters of state law. However, Flutters argument was that the amount the state was seeking was unconstitutional, and violated the Eight Amendments provisions against excessive fines.

The final outcome was just as Flutter had promised its shareholders. It settled for $300 million, still a substantial amount but much less than the state was seeking.

From a poker players perspective, one of the most dramatic consequences of the pandemic was the cancellation of the 2020 World Series of Poker. Until that point, the series hadnt missed a year in four decades.

It was everyones expectation that the arrival of vaccines meant the series would be back in 2021. The question was what form it would take.

Due to uncertainties, WSOP was slow to make its announcements. The plan it eventually settled on was to delay the live series until the fall, but do a repeat of its Online Bracelet Series over the summer, since that had been such a success the year prior.

Attendance was well down due to vaccine requirements and difficulties around international travel. The series also struggled a bit with dealer availability. Overall, though, it went off quite successfully given the circumstances.

The Flutter-Kentucky case wasnt the only legal cliffhanger coming in to 2021. One of the three First Circuit judges hearing the Department of Justices appeal of the Wire Act case had just died. That left it unclear whether the case could continue or require a rehearing. At stake was the legality of multi-state poker, as well as other forms of interstate gambling compacts.

Fortunately, the other two judges were in agreement, so the final vote was a moot point. The DOJ lost on appeal, and the Biden administration had already indicated that it didnt want the case going to the Supreme Court.

Unfortunately, the DOJ has ignored pressure to formally reverse its opinion about the Act. As a result, the story hasnt quite reached its conclusion. IGT is now seeking declaratory relief to make sure the DOJ doesnt attempt to resurrect the case in future.

We expected Ballys to be a big story in 2021, but its been more of a slow burn. The company formerly known as Twin River Worldwide Holdings had acquired Ballys Atlantic City and the Ballys name in 2020 and was in the process of rebranding itself using that identity. It had also begun raising capital and engaging in a series acquisitions with the intention of entering the online gambling space.

As it turns out, the Bally Bet Sportsbook has launched and is available in three states so far. However, the brand hasnt yet made its entry to the online casino vertical.

This is a story we expect to continue into 2022. What Ballys has done this year is complete its $2.7 billion acquisition of GameSys and replace its own CEO with that of the latter company. This is a clear sign that iGaming is in fact a big part of its future plans, but that its not rushing into things. Board Chairman Soohyung Kim toldOPRas much in June.

BetMGM, the joint venture between MGM Resorts International and Entain, had all the markings of becoming a dominant force in US online casino gaming. However, as of Dec. 2020, it was still in second place in New Jersey and had only just launched in West Virginia and Pennsylvania.

The question going into 2021 was whether it would in fact turn potential into reality. The opening of the Michigan market (see below) was going to be a key part of that.

As it turns out, the answer is an emphatic yes. BetMGM Casino rapidly established itself as the dominant force in the new state, with more than one-third of the total revenue. It is now the clear US market leader in the iGaming vertical, and competitive with the likes of DraftKings and FanDuel when it comes to the combined market for iGaming and online sports betting.

The one area in which it struggles is online poker. Though BetMGM Poker now operates in the same three states as PokerStars, it trails by a large margin in terms of traffic and revenue.

At the moment, few enough states have legalized online casinos that its hard to predict how a launch will go. As a result, there was considerable curiosity surrounding Michigans. It had originally tried to speed up the process and get off the ground in 2020, but in the end, there was just too much red tape. In the end, the state settled on Jan. 22, 2021 as its go live date.

All that waiting proved to be worth it. By the end February the states first full month of operation 11 of 15 brands were already up and running. More importantly, Michigan revenue was already comparable to other more established markets like Pennsylvania and New Jersey. This was in stark contrast to the early months for Pennsylvania, as that state took quite a while to get up to speed.

Best of all, Michigan is on course to exceed $1 billion in total iGaming revenue for 2021. Due to the late January launch, it will get there later than NJ and PA, but has probably already cleared the milestone though we wont get the official full year numbers until sometime in January.

Of course, the most important online gambling story of any given year is whether any new states legalized it. The top contenders for 2021 were Connecticut and Illinois, and they went 1-1.

Connecticut has wanted to legalize sports betting for some time now but faced complicated political challenges. The solution that lawmakers and the states tribes finally agreed on was a win-win, as iGaming proved to be the bargaining chip to make it all happen.

The market consists of just two full service brands, one controlled by each tribe, plus a single sports betting skin for the state lottery (with no iGaming). That relatively small number of moving parts facilitated the launch process, such that the state was able to get up and running in October.

Illinois did not fare so well. Despite a promising-sounding bill with provisions for a rapid launch, the effort stalled in the spring. Efforts will resume in 2022, but at least one key stakeholder expects that success wont come before 2023 at the earliest.

This outcome for 2021 is a bit of a disappointment. The closure of retail casinos during the pandemic illustrated for a lot of states why having an online casino option is so important for tax revenue. Many industry pundits therefore predicted a wave of legalization that hasnt yet come to pass. That may still happen in future, but for the time being it seems that many states are still adjusting to the idea of sports betting, and need more time before theyre willing to consider online casinos.

With all that going on, its amazing that the industry found time to do anything else. Even so, it managed to fling a few curve balls into the mix. Here are the two stories we didnt see coming:

Corporations are inclined to compete, not cooperate, and so joint ventures dont last forever. It was inevitable that sooner or later, MGM Resorts and Entain would try to find some way to disentangle themselves, whether through acquisition, buying out the others share, or spinning offBetMGM as a separate company.

That happened sooner than expected, however, as MGM Resorts made an offer to buy not only the rest of BetMGM, but Entain itself. However, Entain was having none of it.

Things took a turn for the weirder when DraftKings took its own shot. Entain rebuffed that overture as well, and DraftKings shareholders seemed unimpressed by both the offer and its eventual failure. That may, in fact, have been the prick that burst the DraftKings stock bubble, as its shares have dropped by more than half since September highs.

Scientific Games is one of the industrys biggest business-to-business companies. Until 2021, it had kept its focus broad, supplying lotteries, sportsbooks and casinos alike. Early this year, however, it told investors that it saw the casino vertical as its future. In order to dedicate its resources to that, it would be selling off the lottery and sports betting arms of its business.

Despite the big price tags involved, it took only a few months to find buyers. It has subsequently reinvested some of that newfound capital in acquiring Authentic Gaming, in order to add live dealer capabilities to its portfolio. It will be interesting to see what 2022 holds for the company, as the burgeoning US iGaming market seems to be part of the reason for its strategic shift.

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Seven Stories We Expected In 2021, And Two We Didn't - OnlinePokerReport.com