History Of Legal Online Gambling In New Jersey – A Detailed Timeline

New Jersey’s history with online gaming has undergone a number of major shifts in the last half decade. Parsing the exact trajectory of the industry requires a close look at all significant events that happened during the tumultuous ride since the 2013 launch of the state’s online casinos and poker rooms.

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Pre-2013

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Online gambling in New Jersey (as in the rest of the United States) was restricted under a combination of laws:

Based on these laws, businesses could not accept money in connection with online betting. Fantasy sports and skill games were specifically excluded from the UIGEA, and lotteries were not mentioned.

Offshore online poker rooms continued to allow players from the United States, but several major operators such as Party Poker, 888, and iPoker left the US market to await a more favorable legal environment with the hope of returning later. Industry leader PokerStars and several others remained in operation until:

  • April 15th, 2011, Black Friday. The founders of PokerStars, Full Tilt Poker, and Absolute Poker, were indicted for violating the UIGEA. This effectively shut down online gaming within the US (aside from illegal offshore operations), and also led to PokerStars being labelled a Bad Actor in most states.

2013

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  • February 26th – NJ Governor Chris Christie signs bill A2578/S1565 authorizing licenses for online gaming sites partnered with existing land-based Atlantic City casinos. The state legislature had been trying to get the law through since 2010 but the governor had opposed it, vetoing it several times before sufficient changes were added such as a 15% tax across all internet gambling revenues (brick and mortar casinos pay 8%.)
  • July 1st – Starting with Caesaers Entertainment all twelve of the Atlantic City casinos apply for licenses to launch online ventures. Six of these land-based partners begin building websites: Borgata, Caesars, Golden Nugget, Tropicana, and two Trump properties.
  • November 21st – Soft launch, thirteen gaming sites (seven casinos and six poker rooms) come online with limited access for testing. This evaluation period is deemed successful.
  • November 26th – Official launch. 888casino, 888poker, Betfair Casino, Betfair Poker, Borgata Casino, Borgata Poker, Caesars Casino, Harrahs Casino, PartyPoker, Tropicana Casino, Ultimate Casino, Ultimate Poker, and WSOP.com all are granted permission to expand to full operation 24 hours a day.
  • December 16thGolden Nugget Casino, which had been unfortunately delayed in getting up and running finally joins the market.

By the end of the year over 125,000 player accounts were created. The initial surge of traffic was strong, even though there was only just over one month of revenue for the year.

Limited mobile options were available from the start, but it would take years of improvements and games being added before these were a significant factor in the industry.

However, right from the beginning online casinos suffered from fairly serious technical issues. While software stability was sufficient for the state’s Division of Gaming Enforcement, minor connection problems would plague the sites, particularly flaws in the geolocation process that would occasionally prevent players from being able to maintain connection when their computers could not prove they were located within the state boundaries as required by law.

Despite New Jersey’s legislation being written without the inclusion of any Bad Actor clause, PokerStars was still not permitted to partner with a New Jersey casino until its legal problems from previous UIGEA violations could be resolved. This would keep PokerStars from getting a new hold on the US market for several years.

2014

virgin casino

  • January 10th – the three largest poker operators (Party, 888, and WSOP) begin providing free Wi-Fi adaptors to players in an attempt to resolve the geolocation problems.
  • January 19th to February 4th – WSOP.com hosts the first NJ online poker tournament series, The New Jersey Online Championships.
  • January 21st – The first major jackpot win is reported by Borgata Casino, over $150,000 from a progressive slot machine.
  • January 22ndVirgin Casino is added as a sister site to Tropicana Casino under the same license. The two sites would go on to share the same software and offer almost the exact same game repertoire and similar promotional offers to this day.
  • January 31st – it is reported an additional 50,000 accounts had been added.
  • February 28thcontinued geolocation issues combined with reports of slow payment processing result in the first reported drop in traffic. Activity falls and stays reduced throughout the spring and summer.
  • March 6th – Poker rooms begin offering online eWallet service NETELLER as an option for deposits to attempt to resolve banking issues. This is the first time NETELLER us available transactions in the US since 2007, joining competitor Skrill which was available in NJ since the November launch. Withdrawals through NETELLER are not immediately available, so some banking problems remain for more months.
  • September 16th – Trump Plaza shuts down, leaving Betfair Casino and Betfair Poker without a land-based partner. An agreement is made to allow them to operate under Caesars’ license temporarily until they can find a permanent partner.
  • September 20th – Ultimate Casino and Ultimate Poker announce they are shutting down after land-based partner Trump Taj Mahal fails to pay them. Trump Entertainment files bankruptcy.
  • November 16th – Pala Casino is launched, the first new site since January. Pala also announces their intention to add a poker room in the near future.
  • November 18th – Betfair Casino makes a permanent deal with Golden Nugget to share their license. The partnership proves very strong year for the two sites.
  • November 30th – Total player accounts created now over 500,000.
  • December 1st – Betfair Poker officially closes, leaving only four poker rooms in the state.

Growth was stifled throughout the year because of all the technical problems, made worse by the closure of several of the real-world casinos. Serious improvement was not seen until autumn when new life began to appear.

Ultimate Casino closing and Pala opening around the time that most technical issues were finally resolved provided a much needed reset for online gaming, and the decreasing of the number of poker rooms proved very beneficial as less options consolidated focus of the player base.

Despite the unfortunate constraints, sites did provided fair revenue throughout the year establishing New Jersey online gaming as a formidable industry. In its first full year report the DGE determined that NJ online gaming represented 90% of all online gambling revenue in the US. Roughly 25% of this was from online poker with the other 75% from casino games.

2015

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  • January 12th – 888poker NJ and WSOP NJ begin to pool liquidity to better compete with the Party/Borgata shared network. This not only pushes the combined WSOP/888 network into first place above its rival, the reduced competition also proves very beneficial to New Jersey’s poker activity overall.
  • February 27thResorts Casino is launched partnered with Resorts Atlantic City. Resorts does not offer a poker room, maintains a relationship with PokerStars in order to hopefully be their avenue back into the US market later.
  • March 23rd – NETELLER acquires Skrill, making both major eWallet options the same company.
  • March 24th – Nevada and Delaware begin merging interstate poker liquidity. New Jersey remains sequestered on its own and will remain so far several years.
  • July 7th – Golden Nugget begins major software upgrade with NYX Entertainment.
  • July 23rd Mohegan Sun Casino site launched on Resorts’ license. Mohegan and Resorts Casino run on the same software and offer almost identical games and experiences.
  • September 15th – PayPal finally becomes available for deposits and withdrawals on NJ sites. The rollout is limited at first, but the service gradually becomes offered on most sites.
  • October 1st PokerStars is finally approved to return to New Jersey thanks to its partnership with Resorts partnership. A launch is planned for November, but later delayed to the following year due to red tape.
  • December 9th – NYX completes its overhaul of software for Golden Nugget site. Additional games are added and mobile options are improved. Resorts creates a partnership with NETENT for similar software revamp of their sites.

With now a full previous year of data to compare to sites were able to show vital year-over-year revenue growth. The poker experience greatly improved after liquidity was rearranged into only two networks and the remaining poker rooms were able to flourish with the reduced competition.

Casino activity continued to improve throughout the year, with the new sites integrating into the market gently thanks to the spaced launches. Golden Nugget’s upgrades positioned it to be a driving force in the market in the years to come.

2016

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  • March 16th  PokerStars NJ finally launches, PokerStars first operation in the US since Black Friday. The site quickly becomes the dominant New Jersey poker network, at least at first. After the initial novelty fades the WSOP/888 becomes competitive, with the two networks shifting position for the top spot repeatedly. Party/Borgata remains a close 3rd.
  • March 22nd – Pala launches PalaBingoUSA, the only New Jersey site dedicated specifically to online betting on bingo. This has yet to prove important or significant in any way.
  • March 29th – PartyPoker launches lottery SNG format, the first in New Jersey. 888 follows in July.
  • August 11th – Golden Nugget adds Live Dealer games. The new feature allows players to simulate a more real-world gambling experience online. The format quickly proves more popular than expected and options are expanded. Golden Nugget – which had overtaken Borgata as New Jersey’s online casino revenue leader in June – sees significant additional growth.
  • September 13thPlaySugarHouse Casino launches, the first new online casino in over a year. Though the real-world SugarHouse Casino is over the state border in Philadelphia, the site operates under Golden Nugget’s license.
  • November 8th – United States political elections occur. New Jersey holds a public referendum to possibly allow two casinos to be built in northern part of the state, the first outside of Atlantic City. This proposal is overwhelming voted down. (Unrelated, a candidate backed by Las Vegas magnate and major opponent of online gambling Sheldon Adelson wins the US presidential election.)

The addition of PokerStars did not have the overwhelmingly massive boosting effect on New Jersey poker liquidity that had been hoped-for, but neither did the third network prove too much for the small market. Overall total poker activity did increase, and the state soon reached a satisfying equilibrium between the competitors.

The new format options of PokerStars’ lottery SNG tournaments and Golden Nugget’s Live Dealer table games proved to be the years big innovations and formidable drivers of traffic. Casino revenues sustained their dominance over that of poker, as is industry standard.

Overall profits continued to significantly improve year-over-year.

2017

betfair live dealer

  • May 18th – Betfair Casino joins partner Golden Nugget in offering Live Dealer games. To date these are still the only New Jersey casinos with the format, but it continues to prove popular at both.
  • June 6thPala Poker room opens. Despite operating under Borgata’s license, Pala decided not to share liquidity with Party/Borgata instead operating their own small poker network. While the software was perfectly adequate this decision has kept activity extremely low, making the network a very distant fourth place in the NJ market with few table options. Popular speculation abounds that Pala was not really interested in competing within the state and instead was proving a concept and preparing to build a much larger competitive network with future Pala sites in other states interstate liquidity is finally legalized.
  • July 31stScores Casino is launched, loosely branded after a gentlemen’s club that once operated within one of the Trump casinos in Atlantic City. While under the Borgata license, the site appears to just be another skin for Pala Casino, operated by Pala and using the same software and setup.
  • August 1stplayMGM Casino is launched. Like Scores, this also appears to be a Pala skin. Oddly, the site is branded as an MGM property, which is the parent company that owns Borgata, whose license is used by Pala, who runs playMGM, in a strange cyclical incursion. playMGM also offers poker, though the site shares its liquidity with the Party/Borgata network despite Pala still remaining separate.
  • October 13th – New Jersey announces an agreement to share poker liquidity with Delaware and Nevada has been signed by the governors of the three states. It is unclear how long it will take to solve the technical and regulatory hurdles, but interstate liquidity is finally in the works.
  • October 30th – Neighboring state Pennsylvania legislates online gambling, posing a potential competitor for casinos but also another possible liquidity share for poker rooms.
  • October 31st – Monthly reports indicate that the state has already broken the yearly revenue record with two months left to go in the year
  • December 4th – The Supreme Court of the United States hears New Jersey’s legal challenge to PASPA, the Professional and Amateur Sports Protection Act. This law prevents legal betting on sports betting outside of Nevada, and a successful court ruling would allow New Jersey to begin allowing online gambling on sporting events. SCOTUS expected to rule on this decision and possible strike down the restrictions by summer of 2018.

Gentle sustained expansion of casino offerings proved extremely successful in providing record revenues this year, both in the form of a few additional sites as well as a major increase in games at existing sites. Golden Nugget and Pala can be credited as major driving forces, but also in general the overall maturity of the industry as it has grown better at promoted traffic and efficiently and responsibly running its sites.

Online poker has also become far more revenue efficient even as overall cash game traffic continues to gradually decline. While the coming boost in activity from the interstate compacts is likely to be a big benefit there are no expectations that liquidity will ever regain the higher levels from when online poker was first introduced. Still, operators have become much better at generating revenue despite this, in New Jersey’s case largely thanks to a shift that has focused the player base’s attention on successful lucrative tournament series.

2018 expectations

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The coming year has a number of opportunities. With interstate liquidity coming, online poker could see a major boost. At first WSOP is poised to benefit the most from this, as they already have a presence in Nevada and Delaware. However PokerStars “bad actor” status is also expiring, which will finally allow them to operate in Nevada. If PokerStars moves quickly enough they can also grab a foothold in Nevada to minimize the advantage WSOP will have thanks to their head-start. In any case more liquidity benefits online poker overall.

Pennsylvania’s online gaming is also anticipated, but it is unlikely to have any major effect on New Jersey’s casino activity and revenues any time soon. There is still a chance that interstate liquidity can be arranged with Pennsylvania’s poker rooms at launch or shortly after, though while this would be highly beneficial (most especially to Pala Poker) we are still many month away from seeing if this idea is even feasible.

The state also seems confident there is a favorable probability in the coming PASPA decision, which would prove massively paradigm-shattering for New Jersey’s gaming industry.

Finally, even if none of these potential changes come to pass the state can assume continued improvements in casino revenues, although the record-breaking pace of previous years is likely to level off. At least two more online casinos are expected to launch — one at Hard Rock and another at Ocean — so the potential exists for the market to enjoy renewed growth.