Envisioning a Combined PA and NJ Poker Market

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Saturday, February 20th, 2016 | Written by Stephen Smith

There is a general consensus among industry experts that Pennsylvania will likely be the next state to legalize online gambling in the US. While most consider the matter of whether or not the Keystone State will make iPoker legal as a question of when rather than if, what still remains to be seen is what the market will look like once Pennsylvanians are able to play poker at the virtual tables. Many insiders are even speculating that Pennsylvania could end up in a partnership with neighboring New Jersey, in the process creating a population pool of 20 to 25 million potential online poker players.

Ideal for Liquidity

Together, Pennsylvania and New Jersey boast a population of more than 21 million. With a potential pool of players that large, the Pennsylvania-New Jersey iPoker market would be the first that would be able to realistically support two to three online poker sites with enough liquidity to be attractive to players. With the number of expected players in Pennsylvania combined with the number of known players in New Jersey, there would likely be enough people ready for up to three sites to always have 500 to 1,000 players logged in at any given time.

In addition, the proximity of New York City to the area could mean that many New Yorkers will travel over the border to legally play. This could bump up the possible player pool to as much as 25 million, meaning even more liquidity for sites. Of course, in order for more than one site to prosper in a Pennsylvania and New Jersey interstate poker market, there will need to be only moderate competition. If there are too many sites competing, players may spread out, meaning poor liquidity on each site. Still, prospects look good for a combined market.

Possible Partners

So exactly who might be the big players in the theoretical Pennsylvania and New Jersey market? While, of course, everything is just speculation at this point, there are a few likely partnerships that could emerge with:

– BWIN.PARTY. If the company’s recent acquisition of GVC doesn’t mean an exit from the online poker market, the site already appears to be in the perfect position to partner with both New Jersey and Pennsylvania casinos. Currently, the provider works with Borgata in New Jersey and has already revealed that they have signed an agreement with a confidential casino partner in the Keystone State.

– 888. The operator is in an ideal position to be a part of a New Jersey and Pennsylvania interstate compact. The company has already teamed up with Caesars in New Jersey and has a deal with the Mount Airy Casino in the Poconos region of Pennsylvania. There is also a rumor that 888 is in the midst of negotiations with the Harrahs casino in Philadelphia.

– PokerStars. Fresh into New Jersey with Resorts Casino in New Jersey, PokerStars is only now beginning to return to the U.S. iPoker market. While they do not have a partner in Pennsylvania yet, Resorts is under the umbrella of the Mohegan Sun, and there is a second Mohegan Sun casino in Pocono Downs, Pennsylvania.

Pa/NJ Biggest Resorts Outside of Nevada

In 1978, the Resorts Casino Hotel opened in Atlantic City, making the venue the first legal casino to launch outside of Nevada. Since then, New Jersey’s gambling industry has expanded dramatically, and despite increasing competition from neighboring states, still managed to maintain its status as the country’s second biggest gambling market until 2012 when Pennsylvania wrestled the title from the Garden State.

Pennsylvania only launched its own casino industry in 2006, which was the year Atlantic City saw its revenues peak at $5.2 billion, before plummeting to $2.86 billion by 2013. Back then, Atlantic City even had 12 land-based casinos but with ailing fortunes four have since gone out of business leaving just 8 remaining.

In the meantime, Pennsylvania’s casino market has gone from strength to strength, and after passing $3 billion in revenue in 2011, eventually overtook New Jersey as the country’s second biggest casino market in 2012, after generating $3.15 billion that year. The trend has continued ever since, and in 2015 Pennsylvania’s gambling market collected $3.17 billion, compared to the $2.56 billion of New Jersey, which has now seen its revenues decline for nine straight years. One of the factors in Pennsylvania’s favor is that its casinos are not restricted to just one geographic region, as is the case in Atlantic City, although New Jersey is currently considering expanding its casinos into the northern part of the state to address the issue. As Doug Harbach from the Pennsylvania Gaming Control Board explains:

“I think there is a market niche for all of the casinos in different states. And in Pennsylvania, one of the keys, thus far, has certainly been the fact that these casinos are not in one location but scattered throughout the commonwealth. And that means if someone wants to jump in a car and be at home later that evening, they can do so in Pennsylvania.”