Delaware iPoker Revenues Jump 22% In July

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Wednesday, August 27th, 2014 | Written by Stephen Smith

The Delaware Lottery has just released its latest tranche of iGaming results for July, revealing a 7.6% fall in revenues to $173,096 compared to the $187,944 the Diamond State generated in the previous month. In contrast to June, however, online poker reported an uptick in revenues, while online gambling went in the opposite direction.

Casino games slide in July

In July, Delaware’s three online gambling sites generated $141,698 from casino games compared to the $162,337 collected in June. That 12.71% fall in revenues was in marked contrast to the 124% stellar growth reported in May and, as a result, last month casino games accounted for 82% of the state’s overall online gambling revenues, down from 86% in June.

Poker shows some growth

Delaware could at least take some encouragement from its poker results, which noted a 22.6% jump in revenues to $31,398, compared to the $25,607 generated in June. Nevertheless, the base line comparison was rather skewed as June also represented Delaware’s lowest monthly poker tally since the state launched its first iGaming website in November, 2013. Delaware’s iPoker results are even less impressive when one considers state revenues have now fallen from a peak of $106,922 in December.

The challenges facing one of the country’s smallest states is further highlighted by the figures coming out of the country’s other two regulated markets, with Nevada’s online poker industry producing $1.037 million in June, with that figure increasing to $2.15 million for New Jersey.

Story so far

When Delaware initially pushed for iGaming legislation, iPoker was being touted as a potential windfall for state budgets and to be fair early revenue results looked encouraging before the wheel started falling of the wagon in recent months. A look at Delaware’s monthly online poker results since inception will give a clearer picture of the worrying trend in the industry:

2013
Nov: $67,928
Dec: $106,922

2014
Jan:   $88,588
Feb:   $74,399
March: $84,476
April: $74,153
May:   $57,468
June: $25,607
July: $31,398

The state’s iPoker results have also failed to capture the imagination of other US state’s currently taking a wait and see approach before starting iGaming industries of their own, and no amount of inflated predictions by optimistic state legislators can overcome the lackluster figures coming out of Delaware, or the other regulated markets for that matter.

Even the Poker Players Alliance has had to curb its enthusiasm when touting the potential benefits of iPoker to the different states across the US, and as PPA Executive Director John Pappas recently explained:

“We need to be realistic when talking to lawmakers about what can be expected from iPoker revenue, particularly when looking at a state-by-state deal where individual states are operating. Until they can have interstate liquidity, I think they will always have lower-than-expected revenues.”

Needless to say, the interstate compact Nevada made with Delaware to share a common player pool currently looks the best bet for rescuing the state’s woeful online poker market.

Delaware land casinos squeezed by competition

The state’s first land-based casino opened in 1995 and by 2010 table games were added to Delaware’s gambling mix. However, competition from nearby states is continuing to squeeze revenues at Delaware’s three casinos, namely Dover Downs, Delaware Park and Harrington Raceway, with particularly emphasis placed on the Mid-Atlantic states which started their own casino industries seven years ago.

According to the Delaware State News reports, Delaware’s total slot machine revenues have declined every year since 2006’s tally of $637 million and by 2013 slots revenue was just $375 million, and for the first six months of 2014 is already down by nearly 10%.

“We’ve seen a steady decline in slot revenues, and slot revenues, for those who don’t know, represent about 85 percent or more of the gaming revenues that the casinos have in the state of Delaware,” explained Dover Downs CEO Edward J. Sutor.

Likewise, table games brought in $63.5 million in 2010 but by last year what number had fallen to just $51.3 million, and in 2014 are currently down by 15.4%.

The situation looks unlikely to improve anytime soon, either, and as Chief Executive Rob Heller of Spectrum Gaming Capital commented last year: “It’s [Dover Downs] not a destination anymore. It’s just a convenience gambling site. If people have to drive past Maryland Live! to get to Dover, it’s just not going to happen. You’ve lost those guests.”