NJ Online Poker Rooms Produce More Revenue Than Brick And Mortar Rooms In AC
Online Poker Report

Given The Chilly Legislative Climate For US Online Poker, New Jersey Rooms Are Holding Their Own

NJ Online Poker Standing Strong
A lot has been made about the lack of liquidity in the New Jersey online poker market, as well as the need for more states to pass online gambling legislation and for New Jersey to partner with these other states to increase the size of its player pool.

Unfortunately, progress on this front is moving very slowly. And even under the best case scenario (a state legalizing online gambling in early 2017) the actual launch would likely be in early 2018.

If that wasn’t enough, there is also no shortage of logistical and regulatory hurdles to reach an interstate liquidity sharing agreement, and it would probably be another one to two years for such an agreement to come to fruition.

In the short term, we’re pretty much stuck with the status quo.

Unless the legislative landscape is radically altered in the US, we may have to get used to the fact that small, balkanized markets are the future of US online poker. Short of turning lemons into lemonade, let’s at least look at the lemons from a different point of view.

What I told you was true… from a certain point of view

The online poker markets in New Jersey, as well as the liquidity pool shared by Nevada and Delaware, are a mere pittance to what the US online poker market looked like back in 2011.

Instead of logging on and seeing thousands of players at hundreds of tables, New Jersey online poker players will find a player pool that numbers in the hundreds and is spread across three different online poker sites.

The small market is also reflected in the statewide revenue numbers, where New Jersey’s online poker operators have flat-lined at around $2 million in monthly revenue collectively, while online casino revenue is seven times as much and continues to grow at a rapid pace.

But as disappointing as the overall online poker numbers are compared to the global market, or even the US market of a half-decade ago, they’re not that bad.

In fact, New Jersey’s online poker rooms are outperforming the state’s poker rooms at land-based casinos.

October 2016 revenue figures for both land-based and online poker operations in NJ as follows:

 

OperatorLand-based poker revenueOnline poker revenue
Borgata$1,283,081$734,152
Caesars (Bally's Harrah's, Caesars)$506,034$641,929
Golden Nugget$72,567N/A
ResortsN/A$1,013,671
Tropicana$222,166N/A
Totals$2,083,848$2,389,752

New Jersey’s “disappointing” online poker industry is roughly equivalent to a 200-table live East Coast poker room. But people expect, and want, something much larger.

Although these figures don’t take into account the operating and marketing costs associated with online poker, the fact that the New Jersey online poker market is larger than the Atlantic City poker market shouldn’t be overlooked or understated.

What does the future hold?

As noted earlier in this column, it’s unlikely much of anything will change in the next couple years.

In the short term, we’re likely to see online poker operators move toward efficiency in marketing and operations. We may also see innovative ideas emerge designed specifically for smaller markets.

At the PokerStars Festival New Jersey, PokerStars Department Head of Live Poker Operations Neil Johnson told me, “There’s all kinds of opportunities that have never been explored.”

Johnson was talking about online driving live tournament traffic in small (both geographically and population) markets, but the opposite is even more unexplored. If the status quo persists, I’d expect to see a lot of experimentation in New Jersey and other smallish markets.

In the long term, widespread legal online poker and interstate agreements seem inevitable. When it does, the current crop of operators — 888, PartyPoker, and PokerStars — will face another challenge, as operators, like IGT, Pala, and beyond, jump into the US online poker market.

The early adopters will have some advantages, most notably experience, whereas the second wave of operators will jump in with gusto, likely willing to spend in order to make up for their late entry.

Sign Up For The Grove Report – US Online Gambling Industry Insights Delivered To Your Inbox:
Steve Ruddock
- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.