Player Pooling Between NJ and UK Reportedly In The Works

New Jersey, UK Take First Steps Toward Sharing Online Poker Liquidity

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Gambling regulators in New Jersey and the United Kingdom have reached “an agreement in principle” to facilitate some type of liquidity sharing between their respective online gambling markets.

The news was first reported by Global Gaming Business.

Still significant distance from a final deal

New Jersey Division of Gaming Enforcement Director David Rebuck emphasized to GGB that the agreement was only a first step in what could be a long and complicated process.

“We’d still have to figure out lots of issues: specific regulations, how the tax rate from each jurisdiction would be applied, player ID and geolocation issues, and other things we probably haven’t even considered yet,” Rebuck told GGB. “But you have to start somewhere.”

Several sources involved in the New Jersey online gambling market were quick to note to OPR that conversations around liquidity sharing were preliminary at best.

The next immediate step in the process: New Jersey operators with international platforms (including 888, Betfair, Gamesys, GVC, and PokerStars) have been asked by the DGE to provide feedback on the feasibility of liquidity sharing by August 1st.

Numerous questions remain

Would this be true player pooling, or just UK access to NJ sites?

Part of the legal rationale for allowing online gambling in New Jersey involved mandating that all game servers be located in Atlantic City.

The New Jersey constitution effectively forbids casino-style gambling taking place anywhere in the state except Atlantic City.

It’s long been unclear how much flexibility there is in the server requirement. But if there’s little-to-no flexibility, then true player pooling with the U.K. wouldn’t be possible.

What would be possible: A system where players from the U.K. were able to sign up and play at New Jersey online poker sites.

Will all operators be on board?

It’s difficult to imagine any scenario in which all operators in the New Jersey online poker market would benefit equally from U.K. / NJ pooling.

PokerStars dominates the global market for online poker, and has already secured significant market share in New Jersey.

It’s certainly conceivable that WSOP NJ and Party / Borgata could balk at the concept of providing PokerStars with an additional competitive advantage via a connection to the U.K. market.

Of course, the two could also conclude that the benefits of expanding the New Jersey market – already straining from supporting more unique networks than the state’s population can realistically support – were sufficient to offset the perceived cost.

How long would the process take?

Given the laundry list of potential concerns and possible regulatory tweaks, I would guess that the launch of fully shared liquidity is likely months away, and is unlikely to come before the end of 2016.

If the agreement simply allows players from the U.K. to sign up at sites in New Jersey, then the launch window could be shorter.

Could casino games follow?

Once the fundamentals of allowing cross-market access have been established, there’s little reason why cooperation couldn’t extend beyond online poker to the online casino sites offered in New Jersey.

The two products share effectively the same set of core regulatory challenges (if anything, poker has a greater regulatory overhang than casino).

Several operators in New Jersey would no doubt find such an arrangement appealing, as U.K. players could provide a meaningful boost to casino products where liquidity matters, including bingo, progressive slot machines, and possibly multi-player versions of games like blackjack and roulette.

A path forward for New Jersey and Nevada?

The news of any sort of agreement between New Jersey and another jurisdiction on the liquidity issue immediately raises the question of why New Jersey has yet to reach an agreement to pool with Nevada’s online poker market.

Nevada Governor Brian Sandoval raised the question directly at a public hearing in May.

The answer appears to have been provided by Director Rebuck to GGB. “We’ve talked to Nevada but the fact we’re limited to one operator makes it a difficult proposition to make to our other operators,” Rebuck said.

Nevada’s online poker market is controlled by a single operator: WSOP NV (powered by the 888 platform). An influx of liquidity from the U.K. into the New Jersey market could motivate MGM (now the full owner of the Borgata) to open its online poker doors in Nevada.

But the path to Nevada is far less clear for the other major operator in New Jersey. The PokerStars platform and related assets appear to be indefinitely shut out of the Nevada market by the state’s so-called “bad actor” clause.

- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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