Spring Ushers in Downward Traffic Trend for Regulated US Online Poker Sites [CHART]

Online poker traffic in all three regulated US markets – New Jersey, Nevada and Delaware – is on a slow but steady decline driven by seasonal, industry and consumer factors.

That’s according to data from the latest Scouting Report – PokerScout.com’s daily analysis publication covering the global online poker industry – captured in the chart below:

What’s behind the decline?

General factors

One of the primary forces at work in all three markets is the weather. As PokerScout noted, “Spring has sprung, and unfortunately that means traffic is heading lower. Activity levels should decline slowly until early-mid April, at which point a steep descent begins.”

Payment processing and geolocation difficulties continue to hamper the market at large, although both likely have a more severe effect on New Jersey than Delaware and Nevada.

Finally, unregulated sites in all three states continue to siphon some level of traffic from regulated sites like Ultimate Poker and WSOP.com.

New Jersey

In addition to those general factors, New Jersey is faced with a few unique pressures:

• The first is that the novelty factor of regulated online gambling – and the mainstream press attention that comes with it – is rapidly fading.
• The second is that major casinos like the Borgata and Caesars have publicly indicated that they’re holding back on marketing to their full player databases until technical and payment issues are sorted out.
• That feeds into the third problem, which is the lack of a concerted, coordinated effort to educate New Jersey residents about regulated online gambling.

Nevada

Nevada is bumping up against the realities of its limited population and will need a major event – like interstate liquidity agreements or the entrance of a major casino willing to aggressively market the product – to stimulate any sort of growth.

Nevada’s recent dip may have been exacerbated by the NCAA tournament, which draws thousands to the books on the Strip (and away from their computers).

Delaware

Delaware’s decline is likewise a function of its limited population.

But Delaware’s racinos have also been disinclined to promote online gambling due to the state’s unique tax structure, which reserves the first $3.75mm in annual revenue for the government’s coffers.

Mitigating factors on the horizon

While all of the above works against the growth of regulated online poker, there are a number of factors on the horizon which could serve to counterbalance the declining traffic trend:

• The NJCOP / Borgata Spring Open could stimulate interest in New Jersey online poker.
• The World Series of Poker could have a similar effect in Nevada (and, to a lesser degree, in New Jersey).
• The liquidity-sharing agreement between Delaware and Nevada will provide a material boost to traffic in both states.
• VISA acceptance in New Jersey should increase with the entrance of Neteller. Other alternative payment methods may also begin to gain traction.
• Geolocation should improve as the technology matures and operators and regulators acquire a greater body of relevant data.

PokerScout’s Scouting Report is a daily newsletter for the online poker industry, with in-depth data and analysis of the market. More information can be found by clicking here or contacting [email protected].

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