Betfair Abandons NJ Poker Site To Focus on Casino Games

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Thursday, December 4th, 2014 | Written by Shane Larson

One year on from launching its online poker site in New Jersey‘s regulated online gambling market, UK operator Betfair has now pulled the plug on its poker product, with the site officially shutting shop on December 1st. The move was hardly a surprising one, though, as Betfair’s poker website failed to garner any interest whatsoever, and the company has said it now intends to concentrate specifically on its online casino product, instead.

New Jersey’s Poker Market

Despite being described as a saturated online gambling market, the Garden State’s online poker market is anything but competitive, with just Borgata/Party and Caesars deriving any revenues from the game. All the other operators in the state have been focusing their efforts on online casino games which have proved a much more profitable part of the whole iGaming industry. In October, for instance, New Jersey generated $9.5 million in online gambling revenues, of which roughly a fifth came from poker.

While Borgata/Party and Caesars accounted for all $1,967,904 of online poker revenues, the casino revenues were more evenly distributed with Borgata/Party collecting $2,183,244, Caesars $1,548,224, Tropicana/Virgin $1,925,238, and Trump Plaza/Betfair $855,869.

Needless to say, unless you are either Caesars or the Borgata then your online poker website is unlikely to gain any significant traffic at all, and looks doomed to fail. Ultimate Poker, for instance, was also forced to shut down its operation in October due to a lack of profitability.

Betfair Poker Revenues Over Past Year

Giving an indication as to how completely Borgata and Caesars have been dominating New Jersey online poker since regulation, Betfair only managed to generate a paltry $90 in revenues for the first five weeks of its operation in 2013, while for the first 10 months of 2014 that insignificant amount has fallen to $50. On the other hand, Betfair New Jersey’s casino products have generated $855,869 in revenues in October alone, and $6,677,288 for this year to October so far.

NJ Players Prefer Casino Games

While pre-regulation all the buzz was about how online poker would help rescue New Jersey’s declining gambling market, it now seems apparent any chance the state has of replacing lost gambling revenues now rest almost exclusively with casino games. Its true online poker was riding a high pre-Black Friday, but since the US DoJ pulled the plug on iPoker stateside, the industry has undergone a seismic shift, and is now a fragmented and fractured version of its former self. Only three states in the US, for instance, allow regulated online poker, and even though those individual states have insufficient liquidity to support a competitive poker environment, they have still chosen to remain separate rather than combining players.

The result is the woeful state of online poker currently being seen in the USA, and the untenable situation was highlighted recently after the country’s first regulated poker site, Ultimate Poker, was forced to shut shop in Nevada last month due to lack of profitability. As Ultimate Poker’s Chairman Tom Breitling, explained at the time:

“As has been the case in other jurisdictions, online poker revenues in Nevada have fallen far short of original projections. Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations.”

Betfair’s Casino Partner The Golden Nugget

Unlike poker, casino games do not require massive liquidity to be viable, and so will likely be the driving force behind future iGaming expansion in the US. When Betfair first launched its online offering in New Jersey, its land-based casino partner was Trump Plaza, but after the venue was closed in September, Betfair was forced into entering into a new partnership deal with Caesars Entertainment. Only recently, Betfair then agreed a new collaboration with the Golden Nugget, and looking forward to the future, Betfair US senior VP of gaming, Don Ryan, said:

“We are very excited to move our operations to Golden Nugget Atlantic City, one of the premier resort destinations in New Jersey. With this relationship, Betfair and Golden Nugget are well positioned to accelerate growth in 2015 and beyond.”

Room For PokerStars In NJ?

Nevertheless, one company that would appear capable of increasing poker traffic and capturing a share of the New Jersey market would be PokerStars, an online behemoth which continues to monopolize the global online poker market with ten times the traffic of its nearest competitors. Whether or not PokerStars will ever be granted access to US markets again remains unclear, however, due to its flaunting on the UIGEA post 2006, as well as the threat of potential protectionist moves by US online operators keen to keep the hugely successful company from US shores. Needless to say, while PokerStars has been negotiating its application for a potential return to New Jersey with the state’s Division of Gaming Enforcement, the process has dragged on for several months now, with various dates having being touted as the definite date for its return, none of which have materialized. The latest prediction of a PokerStars launch date in New Jersey is apparently early 2015.