Poll: NJ Online Poker Players Are Abandoning Unregulated Sites in Droves

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A recent poll of 505 online gamblers by the research firm Commercial Intelligence (CI) has produced some eye-opening numbers when it comes to player preference between licensed and unlicensed online gambling operators in New Jersey.

According to their findings, which CI spoke about at the ICE Totally Gaming Exhibition held in London, 35% of New Jersey online poker players only started playing after licensed online gambling was launched in the state.

Furthermore, of the 65% of players who were already playing at unlicensed sites, 35% have transitioned to licensed online gaming sites.

The data is good news for online gambling proponents

These numbers should help bolster the case for legalized online gambling in the US. The data from CI’s poll demonstrates two things:

  • A substantial amount of potential online gamblers in New Jersey were unwilling to play at illegal online gambling sites.
  • A substantial amount of people willing to play at unlicensed sites have already started transitioning toward legal online sites, showing that they prefer a legal option, but were willing to play on whatever site was available.

The obvious conclusion is that a vast majority of New Jersey online gamblers prefer legal rooms to unregulated rooms, even though the barely two months old legal online gambling industry is still ironing out kinks.

This is a very damaging argument for opponents of regulated online gambling, considering 65% of the current player base in New Jersey was already gambling online prior to legal online wagering being offered.

The idea that banning online gambling will prevent people from playing seems detached from the reality of the situation.

Common sense – and the statistics and data – tells us that if there is a market of people who want to play, illegal operators will step in to fill that void, whether the US has a ban on online poker or not.

A ban may cut into the numbers, but it will not eliminate access to online gaming sites.

Squeezing the unlicensed online gambling industry

Additionally, as licensed online sites persist in increasing their player base and continue their marketing efforts it’s almost a certainty that more new players will be added to the mix and a greater number of players will abandon the unlicensed rooms in favor of the licensed rooms.

This is a positive development whether you are for or against online gambling.

If people are going to gamble we should want them doing so in a regulated environment where there are safeguards in place.

CI’s data indicates that licensed online gambling sites will squeeze unlicensed sites, and eventually put them out of business, or make them an unappealing option – a last resort for the desperate.

Not to mention that unlicensed rooms may find licensed markets unprofitable or simply not worth the time and energy, as was seemingly the case when certain Merge Gaming Network rooms bailed on Delaware and New Jersey recently.

The only appeal of unlicensed rooms

If given the option between licensed and unlicensed gambling sites, the only legitimate reason to play at the unlicensed room would be if they possessed a larger player pool.

So, if licensed online poker rooms have already siphoned 35% of unlicensed rooms’ players in just a couple of months, imagine what those numbers will look like a year from now, or if interstate compacts or federal legislation come about and the player pools at licensed rooms dwarf those of unlicensed providers.

For some people it’s all about the revenue

Another important factor to consider is that unlicensed rooms do not provide any revenue to the state (all that money goes overseas) whereas in New Jersey, licensed online poker rooms not only pay licensing fees but also pay a 15% tax to the state on all revenue.

In the first six weeks that number was about $1.25 million for New Jersey.

I feel like the guy in the AT&T commercial conducting the focus group with kids, but “what would you rather $1.25 million or nothing?”

Furthermore, there are the advertising dollars these companies pump into the local economy as well as the numerous jobs created, ranging from customer support to technicians to marketing positions that are created in the region.

While many people consider online gambling sites to basically run themselves, the reality of the situation is that there is more to it than that.

One example of online gambling being vital to a local economy is the UK online gaming company Bet365, which happens to be the largest employer in its home city (Stoke on Trent) where they employ some 2,300 people.

And that number is expected to grow as they move into a new headquarters. Bet365 is crucial to the local economy, and it’s possible that a US version – or versions – of Bet365 could prove a similar boon to employment figures.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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