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The regulated New Jersey poker industry has endured its fair share of trials and tribulations throughout its brief 16 month history, but none was so impactful as the tumultuous downswing the market endured from last March into April.
That is until now.
In the absence of any planned structural changes, the prospects for April don’t fare all that much better.
Over an equivalent time frame in 2014, volume on New Jersey sites only dipped 7%, which was more or less in line with global industry trends.
There is no easy justification for why New Jersey spent the majority of March bleeding off liquidity, but several theories hold some merit:
As evidenced by the graph, we notice that both New Jersey networks followed similar traffic trends, with Party / Borgata flaunting a slightly less volatile curve.
Current player counts per network as follows (March 1 figures in parenthesis):
WSOP / 888 bore the brunt of the industry’s struggles, ceding nearly 15% of its cash game traffic. Cash liquidity on Party / Borgata dropped approximately half of that margin (8%).
This modest discrepancy is likely accounted for by the strong promotion schedule PartyPoker rolled out in March, in particular the March Marathon promotion.
Among the most potentially lucrative promotions ever offered in New Jersey (it even earned acclaim from the 2 + 2 crowd), March Marathon warrants praise not only for its exceedingly high reward cap, but Party’s willingness to reward consistency over volume.
That said, March Marathon was the latest in a string of NJ poker promotions that significantly increased cash liquidity without having a positive impact on player liquidity. In effect, every time a NJ operator hosts a high profile promotion, it has been burning money.
When March began, New Jersey’s biggest weekly tournaments were exceeding their guarantees by upwards of 50%. These days, the prospect of an overlay looms.
To illustrate, on March 2, Party / Borgata’s flagship Major, a $185 + $15 buy-in, $50,000 guarantee, drew 333 combatants, equating to a $61,605 prize pool.
By March 28, those figures had plummeted 14% (288 entries), exceeding the percentage loss incurred by the network’s cash game traffic by nearly double.
WSOP / 888 Majors haven’t fared much better. In early March, when the novelty of the newly-forged partial liquidity agreement between the two poker rooms still held some allure, the network’s $25,000 guarantee drew 217 runners, smashing its guarantee by over $15,000.
But despite a $10,000 increase to the guarantee, the March 28 iteration of the promotion drew 16 fewer runners, and only exceeded its set benchmark by $2,000 and change.
This April is shaping up in much the same way as last year. Same tournament series, same dearth of meaningful structural upgrades.
It was last April that Party / Borgata hosted the inaugural NJCOP, the network’s first significant cross-promotional event with the Borgata in Atlantic City.
While the series had a notable and expected impact on tournament liquidity, it did little to draw out-of-state players to the cash game tables. Ring game traffic averages only rose 2% during the series.
Expect more of the same when the NJCOP returns on April 16, the only major difference being that players will now have the ability to multi-table live and online tournament events from the Borgata, access to mobile device pending.
Otherwise, WSOP will be hosting two smallish tournament extravaganzas of its own – but again, tournament traffic in New Jersey has proven not to translate into cash liquidity.
Given this, and the fact that cash liquidity dropped 12% in April of last year, I expect the market’s downtrend to continue, both with respect to liquidity and revenue.
The falloff may not be quite as drastic as last year’s, but that’s only because there’s less room to fall.
One wildcard that may alter New Jersey’s downward course is the inception of a new credit card code for legalized gambling.
According to a letter released by DGE Director David Rebuck in January, the code, which will address one of the most glaring deficiencies (payment processing) in the regulated gambling industry, will go live sometime in the spring.
Another: the entrance of PokerStars to the NJ market. Amaya CEO David Baazov recently indicated that he expects PokerStars NJ to launch in the third quarter of 2015.