PokerStars’ ascent to the top of the New Jersey online poker market didn’t take very long at all, as the new arrival overtook the network of Borgata and partypoker in cash game traffic the moment it officially launched.
PokerStars has accomplished this by doing three things:
Evidence of this trilateral assault on the New Jersey online poker market can be seen in the numbers. Industry-wide, online poker cash game traffic is up nearly 20 percent, a clear indication new players are entering the market.
But well over half of PokerStars’ New Jersey players are migrants from the existing operators (as seen in the data below), clearly showing the cannibalization by PokerStars of its predecessors.
Average cash game traffic as of March 15, 2016 (the day before PokerStars’ New Jersey soft launch):
Average cash game traffic as of March 28, 2016 (exactly one week after PokerStars’ official launch):
Data courtesy of PokerScout.com.
To say that PokerStars’ ascent to the number one spot in New Jersey was anticipated is an understatement. However, the speed with which it overtook its competitors is a bit surprising, as most analysts expected it would take several weeks, if not longer, for Stars to pull ahead of its New Jersey rivals.
The rapidity with which the site has risen to the top spot – and the fact that the market has only grown by 20 percent – should be troubling to the other online poker operators.
Interestingly, 888 and WSOP.com have been harder hit by the addition of PokerStars to the U.S. online poker market than have partypoker and Borgata. The 888 platforms have lost 30 percent of their total cash game traffic (a loss of 60 players from their average traffic numbers) whereas the partypoker-powered sites have lost just 20 percent (a loss of only 25 players from their average traffic numbers).
However, 888 and WSOP.com had built up a sizable lead over partypoker and Borgata on this front. Despite losing far more players, and a higher percentage of players, they are in much better shape to weather the storm, in my opinion.
At some point 888 and WSOP.com will see their current traffic decline level off, and I’d be surprised if their average cash game traffic dips below 125 players. That said, if traffic at 888 and WSOP.com does go below 125 players, they could be very hard hit, and what I’m about to say can be thrown out the window.
Caveat aside, the reason I think the decline will end in the near future is because the New Jersey market is so small that short of a total monopoly, grinders will need to play at multiple platforms. So, in addition to grinding PokerStars’ tables, a lot of New Jersey online poker players will have a second site open at the same time, giving that site a core player base that is less affected by attrition.
And that site is likely to be 888 or WSOP.com.
Grinding three platforms is far less likely, which is why the low man on the totem pole will probably fade into irrelevancy.
The reason 888 and WSOP.com are likely to be the more appealing option is because Borgata and partypoker have already dipped below 100 average players, which makes the site extremely unappealing to grinders looking to multi-table. Not only do WSOP.com and 888 possess 33 percent more traffic on average than partypoker and Borgata, but peak traffic at WSOP.com and 888 is around 25 percent higher as well.
If things don’t change, this traffic deficit will likely lead to a slow, prolonged exodus by grinders, which will speed up the rate of attrition for Borgata and partypoker. This would be to the benefit of both PokerStars and 888 and WSOP.com. Unlike 888 and WSOP.com, without a core group of players, partypoker and Borgata may not see their decline level off for quite some time as attrition takes its toll.
A continued decline will likely drop them back to the number three spot in New Jersey’s online poker market, not only in traffic, but in revenue. Considering where they are now, this continued decline could deal a significant blow to the duo – a tandem that has topped the monthly online poker revenue charts every single month since the industry launched in November of 2013.
Fortunately, for Borgata and partypoker, a lot of their revenue comes from tournaments and not cash games, as can be seen by the fact that 888 and WSOP.com have had significantly more cash game traffic for quite a while, but trail Borgata and partypoker when it comes to revenue.
Borgata and partypoker have built up a terrific tournament schedule, and will likely continue to lead on that front, or at the very least remain competitive for the foreseeable future. Especially since as with cash game grinders, there is a lot of cross-platform play by tournament grinders.