The New Jersey online gambling industry’s growth spurt isn’t over just yet.
2017 was yet another year of prolific gains for the now four-year old industry, one marked by notable increases in revenue, and big strides in the area of library expansion.
Not every new idea worked, and the industry does finally appear to be gliding toward a stabilization point, but the positive takeaways far outweighed the negative.
Here’s a look at some of those favorable developments.
1 – A new bar for industry revenue
Our projections indicate that when the NJ Division of Gaming Enforcement unveils December’s revenue numbers, the press release will say that the industry had its first quarter-billion dollar year.
Throughout the first ten months of 2017, NJ gambling sites took in $204.2 mm in gross gaming revenue, which is some $7.5 mm more than they generated in all of 2016. Online casino revenue has shot up 32.3%, and while online poker did take a minor ding, it can be rationalized by the hyped up launch of PokerStars in March 2016.
Raw gains in industry revenue are expected to eclipse $54 mm year-on-year, compared to $48 mm from 2015 to 2016. Admittedly, that disparity should be taken with a grain of salt, as this year’s percentage gains (estimated 27.1%) will be lower than last year’s growth of 32.1%.
Additionally, during the past few months the year-on-year gains have dropped off, dipping as low as 18.5% in July, before settling in at 23.4% for October. Given this recent trend, it does appear that the days of wild growth are coming to an end.
That being said, there may still be enough left in the tank for the industry to eventually generate $300 mm in a calendar year. It just might not be 2018.
2 – Games, games everywhere
One of the main criticisms of the early market was that there just weren’t enough games to entice gamblers used to playing at brick & mortar casinos.
That concern has since been alleviated. In 2017, game library sizes increased by leaps and bounds, with the very biggest NJ online casino sites on the verge of supporting 500 games.
Just how much have libraries grown? We’ve checked our archives and can provide a few examples:
- In December 2016, Golden Nugget Casino supported roughly 330 games. Since, that total has swelled to 460, growth of 39.4%.
- Resorts Casino has shot up even more, from 320 games last December to over 460 the last time we checked.
- Industry newcomer Play SugarHouse had about 250 games in February. Now, thanks in part to a collaberation with Konami, it supports nearly 400.
- Even Harrah’s Casino and 888 Casino, which were notorious for never expanding their libraries, each added more than 20 games recently.
Compared to brick & mortar casinos, which may support over 3,000 terminals, these figures may still sound paltry. But consider just how many land-based slots are duplicates.
Online, each slot is unique — and there’s no waiting around for an open seat.
3 – New ways to play
In 2015, online casino players had slots, video poker, and table games — that’s about it. Live Dealer would prove the first major shakeup to industry norms when Golden Nugget Casino launched it in August 2016, but that would be just the beginning.
2017 has seen a variety of new formats emerge, including:
- Virtual sports
In addition, we’ve also witnessed the spread of the Live Dealer format to Betfair Casino, and an increase in the prevalence of jackpot slots, bingo, and keno games. All told, NJ online casino lobbies are now even more diverse than casino floors in Atlantic City.
On a negative note, there hasn’t been much innovation on the online poker front. The only new product of significance was BLAST on WSOP NJ/888 Poker — but even that only bares a base resemblance to poker, taking on more of the form of a slot machine than even Spin & Go’s on PokerStars.
4 – Shared online poker liquidity
One of the only positive developments for NJ online poker fans hasn’t gone into effect yet, but when it does, it will have sweeping ramifications for the industry.
In October, New Jersey struck a deal with Nevada and Delaware to share online poker liquidity across all three states. With one stroke of a pen, New Jersey online poker is almost guaranteed to grow significantly in size.
Going further, with the recent legalization of online poker in Pennsylvania, it’s now plausible (even likely) that PA will join the Multi-State Internet Gaming Agreement at launch, effectively doubling the population cap of the market in one fell swoop.
Less likely, but even more intriguing, outgoing NJ Senator and online gambling champion Raymond Lesniak has recently introduced legislation that would ease restrictions on where Internet gaming servers must be held (currently, they have to be located in Atlantic City), thus providing a path for NJ to pool poker players with overseas providers.
It almost goes without saying that NJ players will benefit widely from shared player pools, and that the larger the pool, the greater the benefit. At worst, we should see New Jersey players have access to 888 sites in Delaware in Nevada sometime in 2018.
At best, New Jersey will become what Lesniak likens to the “Mecca of Internet gaming.”
On a sour note
If there was one area where the NJ online gambling industry experienced some disappointment, it was in the performance of newly-minted sites.
- playMGM, launched in August, was thought to have the best chance, as it possessed the kind of brand recognition necessary for a quick start. But Borgata revenue has been in line with overall industry trends the past couple of months, suggesting that the launch did not have a material impact on revenue.
- Scores (yes, it’s named after the iconic strip club brand) is merely a skin of Pala Casino, and hasn’t really done much to differentiate itself — or at least not enough for it to warrant much attention from gamblers.
- Pala Poker, which just went out of Beta this week, may see some increased traffic soon. But its first few months have been mired by low to non-existent liquidity.
Given this, it would be easy to conclude that there is no more room for new online gambling operators in New Jersey. But then again, the sole site to launch in 2016, Play SugarHouse, is absolutely crushing it.
So maybe it’s just that the market has gotten to the point where new operators have to provide stellar content or something innovative to find success. Let that be a lesson to Hard Rock Casino, which will likely launch an online gambling operation to coincide with the opening of its land-based casino in 2018.