Will New Jersey’s Successful Online Gambling Rollout Influence Other States?

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After a successful rollout of online gambling, will New Jersey’s success be the tipping point that forces other state legislatures to pass online gambling bills of their own? Or perhaps even the federal legislation?

Keep reading to find out.

Nevada and Delaware never had a chance

Nevada and Delaware may have beaten New Jersey to the punch, but there was nobody in the poker industry (nobody in their right mind anyway) who thought that either of these two sparsely populated states would be able to demonstrate to other states the potential windfall online poker/gambling could provide.

The real hope with Nevada and Delaware was that the commencement of their online gambling industries wouldn’t be an absolute disaster and that they could lay the foundation other states could build on.

It’s not that Nevada and Delaware did anything wrong. In fact both of those states performed their jobs admirably.

The problem is that they simply don’t have the player base to sustain a legitimate online poker industry.

While their lightly populated online poker sites will make a little bit of money, the greater goal of both states all along has been to join forces with other states using the network model that has been prevalent in the international online poker industry for years to increase their liquidity. And hopefully by being “first in”, they will gain a slight upper hand in negotiations with other states.

So Nevada and Delaware need dance partners. But until they demonstrate that online poker and online gambling websites were potential cash cows their dance card was going to remain empty, leaving them in a Catch-22 situation.

But New Jersey and its 8.8 million residents was a different matter. More was expected.

Along came New Jersey

New Jersey has the population to sustain its own online poker economy, and while the state would love to join forces with other states and pool their players, this is not the absolute necessity that it is in Nevada and Delaware.

New Jersey also has the capability to show other states the potential of online poker revenue, as long as their industry thrives.

So how is it doing? Just a week into their launch – and only days into their full public launch – New Jersey online poker traffic has already exceeded Delaware (not a difficult task) and is approaching Nevada’s numbers according to PokerScout.com’s traffic data:

  • Average daily cash-game traffic at Ultimate Poker and WSOP.com Nevada = 200 players
  • Average daily cash-game traffic at 888 Delaware = 18 players
  • Average daily cash-game traffic at the four NJ online poker rooms = 150 players

It’s pretty clear that when it comes to a model other states would like to emulate it will be New Jersey they look to. And if New Jersey’s online gambling continues to grow as it is expected to, you can bet other states and the federal government will start to pay attention.

What will it take for other states to take notice?

New Jersey will have to demonstrate two main things to prompt other state legislatures to take action:

#1 – That online poker/gambling is popular and fairly noncontroversial.

#2 – That online gambling can produce a noticeable revenue stream for the state.

As to point number one, we have seen a good deal of buzz surrounding New Jersey’s online gambling launch.

And other than the random cannonades issued from the SS Sheldon Adelson, opposition to online gambling has been relatively quiet. In fact, the coverage of New Jersey online gambling industry has been mainly optimistic from the outset.

Point number two is a little trickier, and it will likely take a good six months and probably longer before we have anything close to full saturation of the market and reliable revenue data to look at.

To be where it needs to be to bolster online gambling efforts in other states, New Jersey will likely need to see average traffic near 1,000 players.

If New Jersey can demonstrate that both of these things are not only possible, but attainable in a relatively short amount of time, we will likely have reached a tipping point in the U.S. when it comes to online poker and online gambling.

Not only would I expect more and more states to adopt their own online gambling laws, but at some point the federal government might also step in and we could potentially realize the long-held dream of legal online poker in the US with open borders that possibly extend overseas.

The effect on land-based casinos

There is also a third point to consider, one specifically aimed at California and a few other states that have flirted with Internet gaming legislation but have pulled back on the reigns over fears of decimating their land based casino industry.

#3 – Online gambling will have zero impact on live gambling revenue.

New Jersey is in the unique situation of having a long-established land-based casino industry, so if the Garden State can show that their online gambling industry doesn’t affect their land-based casino industry (or potentially helps it) then opponents of online gambling legislation in states like California, Pennsylvania, New York, and Maryland would lose a key argument against regulation.

- 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.
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