When placed in the context of New Jersey Gov. Chris Christie’s fantastical revenue projections, regulated online gambling looks like an abject failure.
Thankfully, when placed in the context of … reality, the picture improves dramatically.
But both states are now showing their first growth in revenue from poker in almost a decade – thanks to the addition of online poker revenues.
While online poker revenues have been viewed as a disappointment by many, we believe it’s also worth looking at in the context of the overall poker market. Notably, on a combined basis (land-based + online) poker revenues will be up in CY14 in both New Jersey and Nevada.
Let’s start with New Jersey, where total poker revenue for 2014 is on pace to approach the peak set in 2007, a year-over-year jump of some 50%:
2015 may bring an even stronger poker performance from the Garden State. The much-anticipated launch of PokerStars should reinvigorate the online market. And, assuming PokerStars still intends to drop $10mm on a physical poker room at Resorts, land-based revenues could also get a jolt.
As Krejcik reminds us, “it’s important to not lose sight of the bigger issue,” when discussing the introduction of regulated online gambling, “which is to grow overall Gaming revenues.”
While Nevada’s poker revenue followed the same general trend as New Jersey, peaking in 2007 and steadily declining thereafter, the drop in Nevada was less severe in relative terms:
Short of some multi-state compact that pulls in New Jersey or other high-population states, it will be difficult for Nevada to realize much more in the way of revenue gains from online poker.
The phenomenon of crossover events that integrate elements of both the live and online poker experience could further accelerate revenue growth from both channels.
The most obvious example is the World Series of Poker, which recently demonstrated the potential of such events via a wildly successful online satellite to the WSOP Main Event. But Party Poker also has some notable successes to its credit, including the NJ Championship of Online Poker and the recent WPT 500 at the Aria, which drew a staggering 3,599 players.
The easy interplay between online poker and marquee live tournament events was one of the core engines of the poker boom. As crossover events become more sophisticated and ambitious – and more widely available with the advance of regulation – their tangible impact on the bottom line for casinos will become more pronounced.