Games do not run round the clock, tournament guarantees are on the low side (and dipping), and low-to-mid stakes No Limit Hold’em games dominate cash game lobbies.
Admittedly, there are still a lot of pieces that need to fall into place. But should NY/PA pull the trigger, then a liquidity sharing compact between NJ and its neighbors to the north and west feels like a logical next step.
Here’s a glance at what the first legal US online poker triumvirate might look like.
Unfortunately, there is no straightforward means of predicting average cash game liquidity for the NY/PA/NJ online poker network.
The closest comparison point is the ring-fenced market of Spain, which boasts a similar population — 46.8 million versus 41.5 million collectively for NY/PA/NJ.
Problem is, these are two very different markets.
Spain features a significantly lower GDP per capita and internet penetration rate than the northeastern US. The nation’s online poker tax rate of 20 percent is also higher than our predicted mixed tax rate of approximately 17 percent for NY/PA/NJ.
Using Spanish market liquidity as a starting point, we derive that NY/PA/NJ would average approximately 975 concurrent cash game players at this time of year. That figure strikes as remarkably low.
A better indicator is to look at current NJ online poker traffic. According to the latest PokerScout figures, the NJ market is currently averaging 320 players.
Applying a straight population multiplier tells us that NY/PA/NJ would average just under 1,500 cash game players — much more in line with our initial assumptions.
NJ is a good starting point for a few reasons:
Online poker is a unique gambling vertical in that liquidity begets liquidity.
One of the primary reasons the NJ online poker industry is restricted to only the most popular game formats is because there aren’t enough table starters to get alternative format and fast-fold games running.
Multiply the population reach of the market by more than 4.5 and the situation changes. With an increase in table starters, former observers are more apt to take a seat.
A compounding effect then occurs, where even more players sit down simply because there are already more options available.
Thus, to use a straight NJ population multiplier to predict NY/PA/NJ online poker liquidity would be overly bearish.
In reality, it wouldn’t surprise if NY/PA/NJ averaged 40-50 percent more liquidity than this figure, or an average of 2,100-2,250 concurrent players.
This figure is much more in line with that of the ring-fenced French market, which features a significantly larger population of 66 million. The French market, however, is hamstrung by overbearing tax rates.
Assuming only one or two thriving online poker sites — and by thriving we mean cash game liquidity of over 800 average players — then NY/PA/NJ would likely play host to some attractive one-off tournament series.
In our comparison market of France, industry top-dog Winamax is poised to play host to an €11 million (~11.8 million USD) tournament series. Second place PokerStars.fr opted for a more conservative route. It’s currently running SCOOP 2017 features a €2.5 million prize pool.
Given this, and the size of recent series that have run in NJ (The PokerStars NJCOOP guaranteed $1.2 million across 43 events), we suspect the largest tournament series in the NY/PA/NJ market will guarantee upwards of $10 million. Second-tier series guarantees will run the gamut from $2-$5 million.
As far as the network’s biggest weekly majors go, a $200,000-$250,000 guarantee on Sundays doesn’t seem out of the question. Conservative estimates suggest that weekday major guarantees will probably range from $10,000-$50,000.
There’s a common thread in just about every ring-fenced European online poker market: There are no more than two major operators. And there are never more than four operators with measurable liquidity.
We wouldn’t expect the NY/PA/NJ online poker network to be any different. This, despite the fact that there are currently three operators in New Jersey — although a case can be made than not a single one is currently viable.
Given the current US online poker climate, we suspect that PokerStars and WSOP/888 will enter into a heated rivalry for supremacy in the NY/PA/NJ market. All other operators will fight for the leftover scraps.
And should the market become too saturated (> four operators) some will be forced to leave. If too many operators hang around too long, the industry could be hindered by market fracturing.
Our reasoning is based on the following:
Based on our analysis, we’ve come up with one possible look for the NY/NJ/PA casino market:
Regardless of the composition of the market, one thing is for certain. An interstate online poker network between NJ, NY, and PA would be beneficial for state coffers.
In a bear case, the triumvirate would collectively generate over $180 million per year in gross gaming revenue. As independent entities, $150 million might prove a struggle.