2017 has seen the NJ online casino industry take a huge step forward, with gaming revenues exceeding $108 million during the first half of the year. Compare this to approximately $80 million for the same period last year, according to the NJ Division of Gaming Enforcement (DGE), and it’s clear that business has picked up in a big way.
Online poker, however, has not kept up the pace. Industry stakeholders and followers were disheartened to learn that June, 2017 was the lowest month ever for NJ online poker revenue. While online casinos have steadily grown, online poker in the state is actually smaller today than it was at the end of 2013, when the market was brand new and sites were still hampered by major geolocation and banking issues.
This isn’t just a New Jersey thing; even PokerStars, the world’s biggest online poker company, has pivoted toward casino, sports betting and other verticals with its international brand. But New Jersey’s trajectory has been particularly strange, and has at times defied expectations.
Competition Continues to Grow
Despite the low revenue numbers and lack of overall growth, there have been some signs of a brighter future. A new site, Pala Poker, launched in June, and playMGM entered the mix in August. While Pala Poker is a standalone poker site, playMGM is pooling its players with Borgata and Party Poker.
It’s interesting to see the wave of new investment in this sector, considering most of the moves in years past were in the opposite direction. Ultimate Gaming closed shop entirely after a slow start in the Garden State, and Betfair gave up on poker after barely a year in the market.
Additionally, in 2015, 888 Poker and WSOP started pooling their players, as market concentration appeared to be a one way street. When PokerStars NJ launched in 2016, they effectively had just two competitors, and many speculated there would be fewer, not more, in the coming years.
Is the Glass Half Full?
In addition to the growing number of poker sites in New Jersey, there are other aspects of the market that you can look at more positively than the overall revenue numbers would suggest.
I haven’t played a Sunday session in more than 6 years, but I remember the joy of ordering pizzas, turning on the football games and firing up 5-10 of the week’s biggest tournaments.
New Jersey, of course, doesn’t have a Sunday Million, but Sundays seem to be going well overall. PokerStars runs a $50,000 Guarantee, and both of the other two main networks each run their own $40,000 Guaranteed tournaments. On most Sundays, all three of these marquee events exceed their advertised prize pools.
The raw numbers don’t sound like much to poker players outside the US, who can routinely take shots at six-figure prizes. For a state with a population under 9 million, however, these weekly guarantees are legitimately attractive.
As was expected when it entered the market, PokerStars has become New Jersey’s go-to destination for online poker tournament series. The 2017 New Jersey Spring Championship of Online Poker (NJSCOOP) paid out nearly $1.5 million in prizes over 70 events, and the New Jersey Championship of Online Poker (NJCOOP), PokerStars’ signature Fall event, will quite likely push that number even higher.
Borgata and Party also team up to run the Garden State Super Series (GSSS) each year, which guaranteed $1.1 million in prizes in the Fall of 2016.
Why Not More Land-Based Integration?
One of the things that always excited me about regulated online poker in the US was the possibility of significant integration of online play and B&M casinos. In a perfect world, everything from loyalty programs to tournament satellites would be linked up seamlessly between the online platform and the casino, and while some of this has happened, I’ve been surprised it hasn’t happened more.
One of the big reasons for the lack of cohesion is likely that most of the state’s online poker brands are not Atlantic City casinos. In fact, Borgata Poker is the only NJ site that bears the same brand name as an Atlantic City property.
Instead of more integration, we’ve seen companies move in the opposite direction. Resorts and PokerStars announced way back in 2013 that they’d be building a new poker room, but that plan has yet to come to fruition, and Resorts hasn’t been talking about it.
Ideally, there would be frequent opportunities to satellite online into live tournaments and pick up other perks at the land-based properties. This is still an area where NJ online poker can grow.
More States Needed for Real Growth
While there are notable positives, cash game and sit-n-go traffic have simply not reached the levels hoped for – and expected by many – before the NJ market launched.
In the early days of this market, I believed that more states would soon be passing their own online poker legislation, and that interstate player pools were likely. A combined player pool of even just two significant states – New Jersey and Pennsylvania, for example – could change the industry outlook entirely.
But it’s been slow moving on the state legislative front, and the federal outlook has gone from mostly neutral to somewhat negative, possibly causing even more reticence among state legislators.
Until more states are in play and sharing liquidity with New Jersey, it’s unlikely we’ll see significantly higher cash game traffic. Player favorites like fast fold and multi-table sit-n-go’s will continue to drag or just be held out of the market entirely.
NJ poker players may just have to wait for outside help before online poker in their home state can begin moving forward again.
Big thanks to Dennis Lopez (@DLO_Rican) for verifying some of the information in this article.