NJ iGaming Weekly: Despite WSOPOC’s Failings, There’s Reason to Hope in New Jersey

If recent history is any indicator, New Jersey’s iPoker operators should have known better than to run special one-off tournament events on a holiday weekend.

To illustrate:

• February 2, 2014: On Super Bowl Sunday, which by all accounts is the biggest unofficial holiday of the year, 7-day cash game averages on NJ poker rooms plummeted to a then 5-week low of 505.
• April 20, 2014:  Marked the first time Party / Borgata held a $100,000 Guarantee that did not eclipse its minimum benchmark. It also happened to be Easter Sunday.
• May 11, 2014: On Mother’s Day, the WSOP.com $25,000 Guarantee featured an unprecedented $10k overlay.

Yet both WSOP and Party / Borgata penciled in June 15th (Father’s Day) as the day to host their most ambitious tourneys of the month.

Suffice it to say, neither the Online Championship Series Main Event nor Party’s $20k High-Roller met their guarantees. As a result, what could have been a rare proud day for NJ regulated Internet gambling may end up being remembered as something of an embarrassment.

But as we’ll explore shortly, the state of affairs in NJ’s online poker scene isn’t all bad.

WSOPOC $200k Main Event draws less than half that in buy-ins

The culminating event of WSOP’s Online Championship series attracted 395 players and 101 reentries, amounting to $99,200 in buy-ins.

And whereas Event #15 was the fourth in sequence that offered players an overlay, it marked the first time that a WSOPOC failed to draw at least half the buy-ins necessary to fulfill a guarantee.

Here’s a quick look at the turnout figures for last week’s other WSOPOC events:

• Event #10 – $250 NLHE Knockout $10k Guarantee:  78 entries, $15,600 prize pool
• Event #11 – $109 NLHE $20k Guarantee: 203 entries, $20,300 prize pool
• Event #12 – $109 R&A PLO $20k Guarantee: 63 entrants, 55 rebuys and 36 add-ons, $4,600 overlay
• Event #13 – $109 NLHE 6-Max Re-entry $20k Guarantee: 125 entrants, 53 rebuys, $2,200 overlay
• Event #14 – $215 NLHE R&A $50k Guarantee: 57 entries, 31 rebuys, 43 add-ons, $23,800 overlay

A few observations:

• Despite boasting a rebuy and add-on option, the WSOPOC Main Event featured an overlay nearly three times that of the similarly structured NJCOP Main Event back in April.
• Given that last weekend’s equally ambitious WSOPOC events came at least within striking distance of toppling their guarantees, it’s probable that the holiday weekend had a overwhelmingly negative effect on traffic.
• Nevada’s version of the WSOPOC Main Event fared significantly better, drawing 575 entrants and 115 rebuys. However, that still wasn’t enough to avert a nearly $63,000 overlay.

It should be noted that Bill Rini and the rest of the WSOP team deserve a heap of credit for the WSOPOC’s aggressive guarantees in both New Jersey and Nevada, if only because no one would have complained if they played it safe.

That being said, I don’t think we’ll be seeing another $200,000+ guaranteed until New Jersey’s market shows sustained signs of life.

Party / Borgata suffers Major traffic woes of its own

The PartyPoker NJ network ran an exclusive tournament event of its own last Sunday – a $530 buy-in, $20k Guaranteed High-Roller event.

Like the WSOPOC Main, the High-Roller failed to live up to expectations, drawing a meager 38 runners and featuring a $2,330 overlay.

Party’s flagship Sunday Major – the $50k Guarantee – which for a while was regularly drawing over 300 participants, only managed 246. That was 25 less than what would have been necessary to avoid an overlay.

NJ iGaming revenues fall for second consecutive month

According to revenue reports released by the DGE, New Jersey’s poker rooms brought in ~$318k less in May than one month prior. This marks the second time the state’s iPoker revenues have sustained a month-over-month loss.

In April, revenues dropped off an alarming 19.3 percent (~$618,000).

Party / Borgata still leads the way with a 53 percent market share, but their lead is anything but dominating. Together, the two generated $1.206 mm in gross revenue. However, the duo did sustain a marginally larger percentage loss than the combined efforts of WSOP and 888 Poker (13.27 percent vs. 10.81 percent).

And Ultimate Poker, which never really gave its more experienced and brand identifiable rivals a run for their money, barely managed to pull in $40k last month. That’s about 1/25th of what WSOP/888 took in.

Given recent trends, I would expect gross revenue figures for June to be roughly on par with last month, perhaps a tad higher.

Cash-game volume exhibits modest growth

It appears that most of New Jersey’s poker rooms are doing just enough to tip cash-game traffic back in the right direction. Either that or they bottomed out so thoroughly that there was nowhere to go but up.

In either case, the market displayed nominal, yet notable, growth over the past week.

7-day cash-game averages, as per PokerFuse Pro via PokerScout as follows:

• PartyPoker NJ: 145 (up 2.8 percent over last Sunday)
• WSOP.com: 112 (falls 5.1 percent in reaching a six-month low)
• AAPN (888 Poker): 59 (skyrockets 25.4 percent after experiencing monumental losses during the two weeks prior)
• Ultimate Poker: 3 (holds steady)

Averages across all networks was up 3.9 percent. Compare this to the global market, which illustrated a 3.9 percent loss.

A small victory, but a victory nonetheless.

So why the volume boost on 888?

Well, it probably has something to do with the recently rolled out Double Points Summer promo.

In many ways a more reserved version of last winter’s 80% Rakeback promo, Double Points will in fact double the amount of status points players who deposit on 888 will receive.

While the Double Points promo is not quite the fire sale that its predecessor was due to the lack of qualification requirements and its broad scope, the promo is arguably more appealing to casual players and certainly more appetizing to tournament grinders. And lest we forget, 888 already offered the most lucrative loyalty program in New Jersey.

Other reasons to remain hopeful for a turnaround

At first glance, there appears to be little cause for optimism regarding the growth of NJ’s poker market.

Revenues are down, cash-game traffic has been in a state of free fall for the past five months, and the industry is still grossly underperforming in the areas of software and at times, customer service. That, and it’s been proven that under all but the most ideal circumstances, the market is not big enough to regularly host $200,000+ guaranteed tournaments.

Yet, the path towards prosperity might not be an elusive pipe dream, for the following reasons:

• PokerStars: In the aftermath of Amaya acquiring the Rational Group, the DGE appears more optimistic towards PokerStars’ reentry into the Garden State. I’m of the mind that while PokerStars’ presence would probably spell trouble for NJ’s current operators, it would propel the industry beyond the heights it enjoyed in January.
• Better, smarter promotions: Gone are the fire sales (mostly) and gimmicky promotions of the welcome period. In their stead are smarter, player-focused promos that reward dedicated grinders with generous cash and prizes, all without forcing operators to reach too deeply into their wallets.
• Value: How long can poker players from NJ, NY and PA simply ignore the tremendous value afforded by playing online tournaments on NJ-based poker sites? Granted, once players start flocking to the sites, that value will decrease. But right now, tournaments frequently tout 25 percent overlays or more.
• Miscellaneous: Software, geo-location, payment processing – it’s all slowly improving.

For more on PokerStars’ chances of coming to New Jersey, and the Amaya deal in general, click here.