Once enacted, the interstate agreement is going to boost overall online poker traffic in New Jersey by 60 percent, and in Nevada and Delaware by 200 percent. (The details of the agreement were recently posted at the New Jersey government website.)
However, with only a single network active in all three states (888 Poker / WSOP NV and WSOP NJ, which I’ll just refer to as “888”), the benefit to individual operators will be imbalanced. Unless one of the four online poker networks in New Jersey — or some other operator not active in the states — gets into the fray, 888 will have a big advantage.
More operators may solve one problem, but it opens the door to a new set of problems. The traffic increase from the interstate agreement could be diluted in that scenario.
One thing is for certain: The 888 network is going to be a player in the three-state network. Beyond that, there is a lot of uncertainty.
Here’s a look at several cash game traffic distribution models that could emerge and the impacts it would have on the operators and players.
If the 888 network is the only one active in both Nevada and New Jersey, it will be gifted a distinct advantage. Other operators are going to have a hard time keeping up.
888 would have more than double the cash games of any other site and would be able to offer far larger tournament guarantees.
That would be good for players clamoring for bigger tournaments and more cash game traffic but not so good for competition and the long-term health of the market. There would be less demand for player-friendly promotions.
Here’s the current average cash game traffic at US online poker networks:
Even if the other NJ sites don’t lose any players, 888 would jump out to a big lead as soon as the states link up, nearly tripling its size in New Jersey and growing by nearly 60 percent in Nevada-Delaware.
Post-merger, the new cash game traffic averages would look like this:
That’s the best-case scenario for 888’s competitors.
More likely, 888’s new stature would lead to it siphoning players from New Jersey’s other operators, with each player migration increasing the odds of the next player leaving.
If it’s the only operator in the two key markets, it’s not hard to imagine a scenario where 888 possesses two-thirds of all cash game traffic in the US, possibly spelling the end of at least one major competitor. That said, all three — PokerStars, PartyPoker and Pala — seem firmly committed to sticking it out in the US.
If everyone guts it out, the US traffic numbers would look something like this after interstate pooling:
Game selection at 888 would be vastly improved. The number of players would jump considerably, and with players in two time zones, three hours apart, peak hours would last longer.
Furthermore, 888’s tournament guarantees would see a substantial increase, with the big Sunday tournament easily hitting six figures every week.
If the PartyPoker network is active in New Jersey and Nevada, things would be much different.
First, MGM and online partner GVC/PartyPoker would need to secure a Nevada online poker license. Second, it would have to launch in the state in the very near future.
It would be hard for MGM to dethrone WSOP Nevada in such a short period of time (assuming the interstate agreement takes effect sooner rather than later), but it does have the capability of grabbing a significant market share thanks to its strong brand.
That market share could perhaps be as much as 40 percent, a number Ultimate Poker was able to maintain in Nevada before it eventually collapsed.
Under these conditions, the cash game traffic numbers would shake out something like below, once the interstate agreement goes into effect:
In this scenario, the market would be more competitive, which is usually good for players.
With Nevada players dispersed across two sites, even PokerStars (active in just New Jersey) would be able to hold its own. There would likely be a lot of player-friendly promotions running at multiple sites.
However, this is only a slight improvement in terms of traffic compared to the current separate markets.
Nevada players would barely notice an increase at 888, and the new PartyPoker offering would still host less traffic than 888 presently.
In New Jersey, the gains would be more significant but not enough to really change the landscape. The guaranteed prize pools of tournaments would increase at 888 and PartyPoker, perhaps to $75,000, but there doesn’t seem to be enough meat on the bone for operators to start dedicating more money to online poker marketing and promotions.
Things get even more dicey if a viable online poker site is active in Nevada and New Jersey that’s not MGM or PokerStars.
Under this scenario, traffic would be spread even thinner. Players in both states would barely notice any liquidity difference other than having another low-traffic site to choose:
888 would be the clear winner again, and New Jersey players would probably get a single Sunday major tournament with a $75,000 guarantee.
The best-case scenario for players happens to be the worst-case scenario for the market’s long-term health: the 888-only model.
Under any other reasonable model, traffic gains will be noticeable but with minimal impact.