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In an earnings call covering the final quarter of 2013, executives at 888 Holdings offered an array of insights into the company’s performance in New Jersey and the potential for other American states to toe the regulated online poker waters.
Taking part in the call were Brian Mattingley, Chief Executive of 888, CFO Aviad Kobrine and COO Itai Frieberger.
When asked for an update on regulatory progress in the U.S., Mattingley spoke first of California, saying that 888 is “bullish about activities in California” and has received an “indication” from potential partners that “there is a willingness by the native North American tribes” to work together on regulation.
While far from the only impediment, lack of cohesion on the best approach to online gambling regulation among tribal gambling interests is generally regarded as the primary stumbling block for bringing regulated online poker to the state.
Despite his optimism, Mattingley conceded that he’s “not really sure whether it will be in 2014,” but believes “there is forward movement” in California.
Mattingley also revealed that he recently met with Pennsylvania gambling regulators and feels the picture there is “looking quite exciting,” noting that pending budget shortfalls could “raise interest in online gaming.”
Finally, Mattingley suggested that New York is witnessing “some activity” centered around online poker.
The first set of revenue numbers for regulated online gambling in New Jersey came in at the low end of expectations.
But both Mattingley and COO Frieberger were quick to dismiss concerns that revenue for November and December provided an accurate template for the months to come.
Mattingley referred to the first period as “very early days” and asserted that the numbers were “not indicative of what the market will end up with.”
Frieberger echoed Mattingley’s sentiments, calling the first five weeks “a trial phase” that were a “bit short of what will be the run rate” and arguing that “that the market will grow, will grow in terms of numbers and will also grow in terms of new customers coming in.”
Mattingley and Frieberger were also in agreement regarding the core challenges to growth in New Jersey: geolocation and banking.
Geo-location problems are on the decline, accordingly to Mattingley, who explained that regulators “have now opened that window a little bit which is allowing more customers to be identified as bona fide players in the state” – a point also made by GeoComply CEO Anna Sainsbury in a recent interview.
But Mattingley was less sanguine on the issue of banking. “I don’t think it will resolve it until the whole U.S. market becomes more attuned to online gaming,” he said, noting that “90% of the population still are banned from playing online.”
Along with the big-picture insights regarding the NJ market for online poker and casino games, 888 executives also provided a more specific window into the company’s performance in the Garden State.
Right now poker provides more revenue for the company than casino.
But, as Mattingley noted, that’s partially by design, as the company has put more focus “on marketing poker to ensure that we have liquidity to ensure that the player experience is good.”
In the future, Mattingley said, 888 will “market more and more towards the casino brand.”